Here is what you need to know on Tuesday, August 13th:
– The flight to the safety of bonds continues with US 10-year yields trading closer to 1.60%. Concerns about Italy, Hong-Kong and Argentina weigh. Currency movements are limited, but Gold is hitting new highs above $1,520.
– Hong Kong: Economic disruption has intensified as the government has canceled outgoing flights after protesters swarmed the airport. Intervention by China may aggravate US-Sino tensions. Both sides are still expected to meet for new talks in September.
– US Consumer Price Index is in the limelight today, and expectations stand at a repeat of the 2.1% Core CPI read. The Fed cut interest rates due to trade tensions and low inflation, and any deviation may impact the dollar and broader markets.
– Italy: The Senate has delayed the no-confidence motion, and it will likely take place on August 20th. Efforts to prevent an early election are still in play, but the euro zone’s third-largest economy will probably head to the polls in October. Fears of a new clash with the EU weigh on the euro.
– The German ZEW Economic Sentiment is forecast to show a deteriorating mood among businesses.
– Argentina: The peso fell some 25% against the US dollar at one point on Monday, and local stocks closed 48% lower in dollar terms after primary elections have resulted in a resounding victory for the populist Fernandez-Fernandez team against incumbent Macri. General elections are scheduled for October. Other Latin American currencies have also felt the pressure.
– UK: Prime minister Boris Johnson and his government expect the pro-Remain camp to act on September 9th to attempt to block a no-deal Brexit and the EU to wait for that effort to fail before offering a new deal. In the meantime, US National Security Adviser John Bolton has promised the UK quick “sector by sector” deals after Brexit.
– The UK jobs report is due out later and projected to show an acceleration in wage growth in June.
– Cryptocurrencies are marginally lower in calm trading.
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