Manufacturing PMI data due this morning is expected to show a slowdown in the pace of growth in the sector to levels not seen since early 2014. Although a slowed pace of growth, it’s still expected to show expansion (reading above 50) and this week unless UK data is significantly out of whack markets will overlook almost anything until super Thursday, when the rate decision (almost certainly on hold) will be released alongside the minutes of the meeting that led to the decision (perhaps two dissenters voting for a hike already) and as the cherry on the cake we have the quarterly inflation report as well. Danske and Credit Suisse are still expecting GBPUSD to head towards 1.60 in the short term, whilst Credit Agricole are holding on to their view that sub-1.50 is on the cards.
Core PCE – the Fed’s preferred measure of inflation, is due this afternoon, and expected to remain at a fairly annualised rate of 1.2%, which alongside some disappointing wage inflation data is leading to a slight pullback in the number of market participants betting on a September rate hike. There’s plenty of data this week for traders to mull over, with Factory Orders tomorrow, Trade Balance and Non-Manufacturing PMI on Wednesday, Unemployment Claims on Thursday and then the all-important Non-Farm Payrolls and Unemployment Rate on Friday.
Greece is supposed to open its stock market today after five weeks of being closed. The government have said that they won’t intervene, and let’s be honest, if you’re a Greek listed business you’re going to have a bad time. It’s unlikely that there will be any signs of contagion, unless falls are deep enough to trigger margin calls which would require leveraged investors to sell stocks in other markets to meet the cash calls. With the danger of a Grexit fading, it’s a shame there isn’t more to focus on from the Eurozone this week – Spanish Unemployment tomorrow, Spanish Services PMI on Wednesday and German Factory orders on Friday. And that’s it.
The soaring value of the Swiss franc after the floor was removed against the euro has led to a loss for the Swiss National Bank in the first half of the year of €50bn, which may affect its ability to pay a dividend this year, which is normally used to pay for public services.
Telegraph – Bank lending to firms rises for first time since crash.
BBC – HSBC profits up 10% in first half.
FT – UK survey shows business confidence up.
Pound Sterling (GBP), Euro Currency (EUR), US Dollar (USD) exchange rates commentary is provided by Argentex (Ag-Fx.com)