Daily Briefing, Aug 8: Economic Events Brief – ECB Economic Bulletin Ahead

Posted Thursday, August 8, 2019 by
Arslan Butt • 2 min read

What’s up, traders.

The market is bit quiet, following the same risk-off sentiment as investors don’t have fresh fundamentals to trade. The US dollar’s dominance is likely to fade as the Federal Reserve gives in to pressures from financial markets and President Donald Trump to cut interest rates by another 50 basis points this year.

As you know, the US central bank Fed released a rate cut last week but the dollar held firm. It was mostly driven by Fed Chair Jerome Powell’s remarks indicating the latest movement as “a mid-cycle adjustment to policy,” dampening expectations for aggressive easing.

Yesterday, the market was all about RBNZ’s astonishing rate cut by 50 base points, but today, the market doesn’t really have any high impact event to drive such kind of movement.

However, a series of low impact events may help determine some trends in the market today, especially the ECB Economic Bulletin and US jobless claims. Let’s take a look.

Watchlist – Key Economic Events Today

EUR – ECB Economic Bulletin – 8:00 GMT

That’s released by European Central Bank around eight times a year, two weeks after the interest rate decision is released.

It reveals the statistical data that the ECB Governing Board evaluated when making the latest interest rate decision, and provides a detailed analysis of current and future economic conditions from the bank’s viewpoint.

Lately, the ECB remarks that global trade is likely to pick up only gradually in coming quarters and will remain weaker than overall economic activity.

Sluggish foreign trade has been the most significant drag on global growth for much of the past year as a tariff war between the United States and China undermined confidence and kept back investment, especially in manufacturing. Let’s see if we get something new from this bulletin, though it’s the least likely scenario.

USD – Unemployment Claims – 12:30 GMT

Newbies, it shows the number of individuals who filed for unemployment insurance for the first time during the past week. Since it’s the nation’s earliest economic data, the market impact fluctuates from week to week.

There tends to be more focus on the release when traders need to diagnose recent developments, or when the reading is at extremes. For now, economists have expected no changes in claims as it’s forecast to be 215K, just like the previous month’s figure. The dollar may not bother to react on its release.

USD – Final Wholesale Inventories m/m – 14:00 GMT

The figure is sort of a preview or forecast of future business spending because companies are more likely to purchase goods once they have depleted inventories.

Final Wholesale Inventories reports a change in the total value of goods held in inventory by wholesalers. As per economists’ forecast, the figure isn’t expected to report 0.2% vs. 0.2% previously.

AUD – RBA Gov Lowe Speaks – 23:30 GMT

RBA Governor Philip Lowe is due to testify before the House of Representatives’ Standing Committee on Economics, in Canberra.

Being a head of the central bank which controls short term interest rates, he has more influence over the nation’s currency value than any other person. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy. Lowe will be in focus, as investors would monitor his sentiment after RBNZ released 1% rate of interest.

Good luck for today, and stay tuned for technical trade setups!

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