Forex Market Recap – 29, Aug. – 2, Sep.

News & Economic Updates:

  • The EIA reported on Wednesday that U.S. oil inventories fell by 3.3M bbl in the previous week, below analysts forecast of -400K bbl
  • ECB’s Villeroy de Galhau said that a “significant” rate hike is needed in September and a return to neutral (around 1% – 2%) by the end of the year.
  • Fed’s Mester sees benchmark rate above 4% and no cuts at least through 2023
  • On Wednesday, China’s Shenzhen enters new four-day lockdown over COVID-19 outbreak
  • China August Manufacturing PMI 49.4 (exp 49.2) & Non-manufacturing 52.6 (exp 52.2)
  • China Markit Manufacturing PMI falls into contractionary conditions: 49.5 in August vs. 50.2 forecast
  • On Friday, the U.S. called Iran’s latest response to the nuclear negotiations a non-encouraging and a step backwards
  • U.S. Non-Farm Payrolls came in just above expectations, unemployment rate ticked higher to 3.7% in August as more return to the workforce
  • J.P.Morgan Global manufacturing PMI fell to 50.3 in August (a 26-month low) vs. 51.1 in July; Price growth slowed while employment remained stable.
  • S&P Home Prices Index rose by 18% y/y in June vs. 19.9% in May
  • U.S. consumer confidence index jumped to 103.2 in August vs. 95.3 July
  • Federal Reserve Bank of New York President Williams pushed back on market expectations of a rate cut next year
  • Chicago PMI for August: 52.2 from 52.1 in July
  • ADP payrolls report showed that employment grew by 132K in August vs. +268K in July
  • U.S. jobless claims totaled a seasonally adjusted 232K for the week ended Aug. 27 vs. 250K forecast and 237K previous
  • Federal Reserve Bank of Dallas President Lorie Logan say number one priority is price stability
  • U.S. Challenger job cuts fell 21% m/m in August, but up 30% y/y
  • ISM Manufacturing PMI for August: 52.8 vs. 52.8 in July; New orders Index: +3.3 to 51.3; Prices Index: -7.5 to 52.5; Employment Index: +4.3 to 54.2
  • The U.S. added a net 315K (vs. 526K previous) jobs and unemployment rate ticks higher to 3.7% as more workers join labor force
  • U.S. Factory orders fell by -1.0% to $548B in July
  • The Bank of England said UK credit card debt grew by 13% m/m, the highest rate since 2005. Mortgage interest rates jump to the highest level since 2015
  • U.K. Mortgage Approvals in July increased to 63.7K vs. 63.1K in June, both below the pre-pandemic average of 66.8K
  • U.K. Manufacturing PMI for August: 47.3 vs. 52.1 in July, new orders and business indexes contracting sharply
  • U.K. house prices rose by +0.8% in August vs. +0.2% in July – Nationwide
  • Governing Council member Martins Kazaks said that the ECB needs a ‘resolute’ hike of at least 50 bps
  • ECB Governing Council member Olli Rehn said that that it’s important to continue a consistent and orderly normalization of monetary policy
  • The European Union is ahead of schedule as it nears its goal to fill up to 80% of its gas storage reserves by November.
  • Euro Area Flash CPI: +9.1% y/y in August vs. +8.9% previous
  • Swiss KOF economic barometer dropped from 90.5 to 86.5 in August, below 88.3 consensus
  • Swiss PMI for August: 56.4 vs. 58.0 in July
  • Swiss retail sales in July: +2.6% y/y vs. a downwardly revised +0.7% y/y in June 2022
  • Canada’s current account surplus Q2 2022: $2.7B surplus, below $6.9B forecast
  • Canada GDP for Q2 2022: +3.3% y/y vs. 4.0% BOC expectations & 4.4% market forecasts
  • Canada building permits in July: -6.6% m/m vs. -0.6% m/m in June; lead by a fall of -8.6% in the residential sector
  • Canada’s manufacturing PMI dropped to 52.5 to 48.7 vs. 53.6 expected in August
  • Canadian labor productivity rose by 0.2% q/q in Q2 2022, the first rise in seven quarters
  • Bank of Japan Kuroda re-iterated that high prices are caused by commodities and will be transitory, needs to maintain easy monetary policy
  • Japanese unemployment rate unchanged at 2.6% as expected
  • Japanese consumer confidence improves from 30.2 to 32.5 in August
  • Japan Housing Starts: -5.4% y/y in July vs. -2.2% y/y previous


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