DAILY MACRO VIEW
There are a number of headline events this week that could catch attention- Fed speak- Waller, George and Kashkari - the market knows what they would say and hence expect the late summer ranges to last this week as well.
FOMC minutes on Wed might be less relevant as . a lot of data falls between the July and Sept meetings – including two inflation and jobs reports.
July`s retail sales will be the most notable U.S. data this week. IP along with a batch of housing data – including building permits and new home sales . Other U.S. data of note includes the Philly Fed index.
USD index set to stay in summer ranges.
U.S. lawmakers arrive in Taiwan with China tensions simmering.Muted China reaction to the Taiwan visit so far.
There are a number of rate decisions this week and unsurprisingly, the bulk will likely involve a large rate hike. The outlier is obviously the CBRT which continues to be driven by unorthodox views on the link between inflation and interest rates, much to the misfortune of all those experiencing nearly 80% inflation as a result.
Global oil markets remained supported by tight supplies in the run-up to EU sanctions on Russian crude oil and refined product supplies this winter. On the other hand
Saudi Aramco stands ready to raise crude oil output to its maximum capacity of 12 mbpd if requested.U.S. oil rig count rose by 3 to 601 last week. (The rig count, an early indicator of future output, has been slow to grow)
Eurozone data this week includes prel Q2 EZ GDP, German ZEW, EZ HICP and current account.The standout here is the final inflation reading as markets assess rate expectations for September. No change is expected but of course, it could surprise.
Support at 10 dma 1.0240 and 21 dma at 1.0215.break below 1.0210 would suggest that the summer high has been seen.
China retail sales, industrial output.China unexectedly cuts MLF, 7-day reverse repo by 10bps.But implications might be construed as negative.Chinese economy is facing a typical liquidity trap problem. No matter how loose the credit supply is, companies and consumers are cautious in taking on more debt.USD/CNH rallies to 6.7671 from open 6.7388. To test 6.8000 barrier- May`s 20-month high of 6.8391 to be challenged soon.
BoE forecast five quarters of contraction from Q4 this year while inflation remains high and rates rise.Multibillion pound package that could lead to an extra £400 cut in energy bills appears more certain - Cost of living crisis will be the key issue for Liz Truss .Data this week : CPI, retail sales & labour data.Close below 1.2104 21 dma to accelerate downside test of 1.1760.
April-June GDP expands annualised 2.2%, misses f`cast.Consumption rises, but questions remain on sustainability.PM orders ministers to draw up steps to temper cost strains.USD/JPY trades within the usually resilient 132.06-135.17 range