Themes for the Week and Potential Opportunities
The G20 ended with a sour tone. Brexit has added more than a touch of uncertainty and the IMF has downgraded global growth forecasts. Overall not a positive start to the trading week.
USD: All eyes will be on the FOMC (Wed) although no move and a cautious tone are expected. The recent data has been better however, and this week’s Q2 GDP (Fri) is expected to confirm solid growth. Durable Goods (Wed) are expected soft, yet slightly better than previous.
EUR: Busy week ahead. IFO (Mon) will most likely set the tone for expectations on Q2 GDP (Fri) as both are expected lower. CPI (Fri) is expected stable along with Unemployment (Fri). German Employment (Thur) is expected to weaken slightly and CPI is expected robust.
GBP: Q2 GDP (Wed) is likely to be strong as Brexit hit only the end of the business quarter. So there might be some room for volatility, but again we’re looking at old data. GFK consumer confidence (Fri) will likely show more information on consumer sentiment post-Brexit.
JPY: Another likely protagonist this week as the BoJ is expected to ease policy (Fri) but there will be a data dump at the same time which will have to be taken into consideration. To be honest, a BoJ underwhelm might be in the cards.
Comm-Dolls: Australia will issue CPI (Wed) which is expected stronger than previous, but not strong enough to take an August rate cut off the table. Canada will issue GDP (Fri) expected lower. New Zealand has June trade data on Monday, building permits on Thursday and NBNZ business confidence on Friday but none of these data points are likely to generate much interest.
Going into the week, US indices are still quite bullish, Crude is weak. In FX, USD still shines and the weakest ccys out there are still Euro, Gbp and Cad. Jpy might surprize on Friday – be nimble.