The US dollar gave up a little ground on Friday despite the solid, yet unspectacular US GDP report, which came in at 4.1%qq against the expected reading of 4.2%. The real interest on the day lay in the stock-markets which headed lower, led by the Nasdaq (-1.45%) and by Twitter in particular, which fell over 20% to $34.12, while Facebook was unable to make regain any of its lost ground after having fallen by 20% Thursday, closing down $1.37 or -0.70%. Elsewhere, it was pretty much a choppy but sideways session with traders either away on holiday or sitting on the sidelines while waiting for the central bank action, starting with the BOJ on Tuesday, and to be followed by the FOMC (Wed) and the BOE (Thur).
Looking ahead, the week will begin on Monday with a light calendar, but with the focus on the German Inflation data (CPI, exp 0.4%mm, 2.1%yy; HICP, exp 2.1%yy), the US Pending Home Sales and the Dallas Fed Mfg Business Climate. Tuesday will be busy, beginning in Asia with the China Mfg/Non-Mfg PMIs and the BOJ Meeting, to be followed later by the Preliminary EU GDP (Q2) and a host of US data, led by the US Personal Consumption/Expenditure Price Index for June. Wednesday will feature the EU Mfg PMIs, which comes ahead of the July FOMC Meeting. No change is expected from the Fed this month and there is no press conference, just a statement, which is likely to reiterate the hawkish tone of the previous meeting. Thursday’s action will focus on the BOE Meeting/Statement/Minutes/Vote Count/APP Facility, where there is a good chance of an August rate hike, with some analysts expecting an MPV vote of 9-0 in favour of a hike. Friday will wind up with the Jobs/NFP/Average Hourly Earnings data (exp 3.9% – Headline rate, 195K – NFP, 0.3% – AHE). Have a good week.
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