Forex
Last week saw the pound continued its appreciation against other currency pairs, even reaching a 7-week high against the greenback. The sterling’s impressive performance was mostly due to the Bank of England Governor Mark Carney, who firmly stated that the bank is ready to implement measures for curbing inflation in the UK. His comments sparked speculations that the BoE will very soon raise its interest rate. Market participants reacted immediately and the GBP/USD rose by more than 220 pips for the past week, reaching 1.5507, while the EUR/GBP lost 85 pips on Friday and closed at 0.8605.
Trading was also interesting among other currency pairs, especially those including the Australian dollar. Last Tuesday, the Reserve bank of Australia reduced its interest rate to a record low of 2.5%, though the change was being expected and came with little surprise. The following press conference of bank governor Glenn Stevens proved to be more interesting, as he indicated that this cut could be the last. The AUD/USD increased to 0.9189, or by the impressive 291 pips.
The EUR/USD pair was also caught in a rather ”turbulent” trading, increasing by 60 pips and closing at 1.3345. On the other hand, the USD/JPY fell by more than 260 pips and reported its lowest closing for the last few weeks: 96.19.
Indices
Last week was the weakest for the US indices since June. Mixed US macroeconomic data and less than impressive financial results on the quarterly earnings front-led to losses of the stock market benchmarks. All three major US indices (the Dow, the Nasdaq100, and the S&P500) ended on the red side of the charts and lost about 1% of their value.
Meanwhile, European indices were mixed last week. The German DAX30 registered a weak period and lost about 0.78%, while the French CAC40, Spain’s IBEX and Italy’s S&P/MIB rose by 0.83%, 1.86% and 2.26%, respectively.
Commodities
On the commodity market, prices of both gold and silver increased during the past five days. Gold added 0.38% to its value, closing at $1,313 per troy ounce; while immediately after opening the session today, buyers were more assertive and raised its value with an additional 1.38% to $1331 per troy ounce at the time of writing. Silver’s appreciation was even more impressive: 3.28% for the past week at $20.46 per troy ounce. It added another 3.31% since the market opened this morning and is currently trading at $21.14.
What to expect this week?
Despite being in the middle of the summer holiday season, this week promises to be rather busy.however having a low start as Monday is offering a modest list of economic events, with the main highlight being the Bank of Japan monetary policy meeting.
Tuesday, on the other hand, has a full basket of data, mainly coming from Germany, the UK, and the US, with the focus on both the German and the UK Consumer Price Index for July, the US Retail Sales also for July and the ZEW Survey on the Euro Zone Economic Sentiment.
Wednesday will see the release of Germany’s GDP on annual and monthly bases, the Bank of England minutes and its Monetary Policy Committee’s votes, along with the country’s Claimant Count Change for July. More data will come from the US and its Producer Price Index, YoY and MoM. Thursday’s main entries are from the UK Retail Sales, the US Consumer Price Index and the US Industrial Production for July. Friday will close the week with data on the Eurozone Consumer Price Index and the US Housing Starts and Building Permits for July, as well as the University of Michigan Consumer Sentiment Index for July.
The earnings season is still in the focus of market participants, and among this week’s companies due to publish their results are Sysco Corp on Monday, E.ON AG on Tuesday, and Wal-Mart and Kohl’s on Thursday.
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