The end of the summer

 

 

August is coming to an end. Towards the end of the summer, a large block of economic statistics is coming from several different countries.

The Chinese PMI for the manufacturing sector came out on the level of expectations. It is difficult to overestimate the contribution of China's economy to the global world economy. Today, thanks to the contribution of the Chinese economy, it is possible to support the global economic growth. At present, green shoots of economic recovery are making their way in many countries. From this point of view, the published index, or rather its value, is extremely important for all markets. This data will have a strong impact on the next few trading sessions.

For high-yielding currencies: the Australian dollar (AUD) and the Canadian dollar (CAD), there also exists data capable of significantly impacting prices.

The change in capital expenditure for the AUD and more important figures for the Canadian currency. For CAD, the most comprehensive indicator of the state of the economy - this is GDP growth will be released. It is these changes (m/m and y/y) that will be published at 12:30 MSK time.

At the same moment, the number of initial applications for unemployment benefits in the United States will be published. In the case of a strong figure, a timid correction for the dollar index will have a chance of continuation, and the currency pair USD / CAD has a chance to approach its maximum values ​​of summer to the level of 1.27, and in turn, the EUR/USD pair, with this development of events, will continue its correction on the opposite side towards the mark of 1.185.

The geopolitical factor also does not leave the participants of the financial markets in peace, it is firmly entrenched in memory and affects the adoption of certain decisions when entering currency positions. Although the "hot" phase of the conflict is not yet real, at the same time, the matter is not moving towards a settlement of the conflict, and with any aggravation, investors are flocking to bonds and safe havens such as JPY and CHF, which have been strengthening recently.

With the advent of September in the United States, discussions will begin regarding the budget and the limits on public debt. In early September, Trump is going to talk about the details of his plan for tax incentives, and the participants of the stock market, in turn, have already laid the positive impact on the economy of Trump's proposed plan, seemingly in advance. These events, although not yet released, yet bearing in mind that the markets live by expectations of what will happen in the near future, already had a significant impact on the dynamics of prices.

What remains is to draw the correct conclusions...

At the end of the summer, volatility has come to the markets and, remembering the above-mentioned forthcoming events, one should be ready for sharp changes in the trends of prices of currency pairs. In the financial markets, deeper movements appear. In the previous review of the EUR/USD pair of August 30, a detailed scenario of the motion is explained in detail, and in the review of August 29, you can get a look at the movement of the S&P 500 index.

 

Care: These reviews are a private opinion of ARUM CAPITAL and are provided for information only. In no way can the provided analysis be considered as an action signal, neither is it any sort of investment advice (for the purposes of EU Directive 2004/39/EC). ARUM CAPITAL waives any liability for the trading results which may arise after using these reviews. These materials contain NO warranties or guarantees, either direct or implicit, on the precise, complete or confirmed character of the details they contain.

 

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