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Eurozone PMI composite rose to 60.6, 21-yr high, enjoying a summer growth spurt

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    Eurozone PMI Manufacturing dropped from 63.4 to 62.6 in July, above expectation of 62.5. PMI Services rose from 58.3 to 60.4, above expectation of 59.6, a 181-month high. PMI Composite rose from 59.5 to 60.6, highest in 252 months.

    Chris Williamson, Chief Business Economist at IHS Markit said: “The eurozone is enjoying a summer growth spurt as the loosening of virus-fighting restrictions in July has propelled growth to the fastest for 21 years. The services sector in particular is enjoying the freedom of loosened COVID-19 containment measures and improved vaccination rates, especially in relation to hospitality, travel and tourism.”

    Full release here.

    Germany PMI composite rose to record 62.5, remains in the fast lane

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      ActionForex.com
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      Germany PMI Manufacturing rose from 65.1 to 65.6 in July, above expectation of 64.1. PMI Services rose from 57.5 to 62.2, above expectation of 59.5, record high since June 1997. PMI Composite rose from 60.1 to 62.5, record high since Jan 1998.

      Phil Smith, Associate Director at IHS Markit said: “Germany’s private sector economy remains in the fast lane to recovery, according to July’s flash PMI survey. Buoyed by a resurgent service sector, the survey’s headline index is now at a record high and signals that the recovery still possesses strong momentum at the start of the third quarter.”

      Full release here.

      France PMI manufacturing dropped to 58.1, services dropped to 57.0

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        ActionForex.com
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        France PMI Manufacturing dropped from 59.0 to 58.1, below expectation of 58.3. PMI Services dropped from 57.8 to 57.0, below expectation of 59.0. PMI Composite dropped from 57.4 to 56.8.

        Joe Hayes, Senior Economist at IHS Markit said: “It’s perhaps slightly disappointing to see the headline composite output figure dip slightly in July, but as the French economy normalises to a state of looser lockdown restrictions, it is not so much of a surprise. Regardless, the PMI pointed to another strong month-on-month rate of output growth, with service providers outperforming their manufacturing counterparts once again.”

        Full release here.

        UK retail sales rose 0.5% mom in Jun, boosted by Euro 2020 start

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          ActionForex.com
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          UK retail sales rose 0.5% mom in June, matched expectations. Sales were up 9.5% comparing to pre-pandemic level in February 2020. ONS said, “the largest contribution to the monthly increase in June 2021 came from food stores where sales volumes rose by 4.2%, with anecdotal evidence suggesting these increased sales may be linked with the start of the Euro 2020 football championship.”

          The volume of sales for the three months to June was 12.2% higher than in the previous three months. That’s driven in large part of particularly strong sales in April.

          Full release here.

          UK Gfk consumer confidence rose to -7, gradual release of pent-up demand

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            ActionForex.com
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            UK Gfk Consumer Confidence rose from -9 to -7 in July. The index has improved for six months in a row. Personal financial situation over next 12 months was unchanged at 11. General economic situation over the next 12 months dropped from -2 to -5. However, major purchase index rose from -5 to 2.

            Joe Staton, Client Strategy Director GfK, says: “The healthy seven-point rise in the major purchase measure aligns with strong retail growth figures that reflect the gradual unlocking of the UK high street and release of pent-up demand as Brits hit shops, restaurants and venues. However, threats from increasing consumer price inflation, rising COVID infection figures, and the looming end of furlough and the Job Retention Scheme could put the brakes on this rebound.

            Full release here.

            Australia PMI composite dropped to 45.2, growth streak brought to a halt

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              ActionForex.com
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              Australia PMI Manufacturing dropped from 58.6 to 56.8 in July, a 4-month low. PMI Services dropped from 56.8 to 44.2, a 14-month low. PMI Composite dropped from 56.7 to 45.2, also a 14-month low.

              Jingyi Pan, Economics Associate Director at IHS Markit, said: “Latest indications from the IHS Markit Flash Australia Composite PMI suggested that Australia’s growth streak had been brought to a halt in July, and perhaps no surprise given the renewed lockdowns aimed to bring the COVID-19 situation under control.”

              Full release here.

              ECB press conference live stream

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                US initial jobless claims rose to 419k, above expectation

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                  ActionForex.com
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                  US initial jobless claims rose 51k to 419k in the week ending July 17, worse than expectation of 350k. Four-week moving average of initial claims rose 750 to 385k.

                  Continuing claims dropped -29k to 3236k in the week ending July 10, lowest since March 21, 2020. Four-week moving average of continuing claims dropped -44k to 3338k, also the lowest since March 21, 2020.

                  Full release here.

                  ECB stands pat, issues new forward guidance

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                    ActionForex.com
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                    ECB keeps interest rate unchanged today, with main refinancing rate, marginal lending facility rate, and deposit facility rate at 0.0)%, 0.25%, and -0.50% respectively. Net purchase under APP will continue at monthly pace of EUR 20B. The EUR 1850PEPP will continue “until at least the end of March 2022”. Purchase pace remain at “significantly higher pace” than during first months of the year.

                    Also, ECB now expects key interest rates to ” remain at their present or lower levels until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at two per cent over the medium term.” It added that this may also imply “a transitory period in which inflation is moderately above target.”

                    Full statement here.

                    BoE Broadbent: The appropriate policy response to current inflation is nothing

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                      ActionForex.com
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                      BoE Deputy Governor Ben Broadbent said in a speech, “most of the overshoot relative to target in the latest CPI numbers… reflects unusually strong inflation in goods prices”. That would also be true of the “larger overshoot we’re going to see towards the end of this year”. “If this was only a story about global goods prices,” he added, then the appropriate policy response to the current inflation would be “nothing”.

                      Also, “while we know it’s going to go further over the next few months, I’m not convinced that the current inflation in retail goods prices should in and of itself mean higher inflation 18-24 months ahead, the horizon more relevant for monetary policy,” he added.

                      Full speech here.

                      EUR/USD lost downside momentum as new ECB forward guidance awaited

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                        ActionForex.com
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                        ECB policy decision and press conference are the main focuses for today, even though no policy change is expected. After the conclusion of the strategic review on July 8, officials are clear that they’re going to adjust the forward guidance to align with the new symmetric 2% inflation target, which allows a temporary overshoot. Overall reactions could, however, be rather muted.

                        Here are some previews:

                        Euro is currently rather mixed in general. EUR/USD is clearly losing downside momentum as seen in 4 hour MACD. But current fall from 1.2265, as the third leg of the pattern from 1.2348, could still extend towards 1.1703 support and even below. Nevertheless, break of 1.1880 resistance would be a sign of near term reversal and bring stronger rebound through 1.1974 resistance.

                        Australia goods exports rose to record 41.3B in Jun

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                          ActionForex.com
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                          Australia exports of goods rose 8% mom or AUD 2.9B to AUD 41.3B in June. Imports of goods rose 7% mom or AUD 2.1B to AUD 28.0B. Goods trade surplus widened to record AUD 13.3B, up slightly from AUD 12.5B. Exports to top five destinations rose, including China (8%), Japan (21%), South Korea (24%), Taiwan (9%), USA (7%).

                          Head of International Statistics at the ABS Andrew Tomadini said: “June 2021 recorded a monthly export value above $40 billion. Exports increased 8 per cent to $41.3 billion, with significant increases in metalliferous ores, coal, non-monetary gold, and gas”.

                          Full release here.

                          Australia NAB business confidence dropped to 17 in Q2, but condition rose sharply to 32

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                            ActionForex.com
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                            Australia NAB business confidence dropped from 19 to 17 in Q2. Current business condition rose from 20 to 32. Business conditions for the next 3 months rose from 28 to 36. Business conditions for the next 12 months rose from 31 to 33. Capex plans for the next 12 months rose from 34 to 37.

                            Looking at some more details, trading conditions rose from 26 to 38. Profitability rose from 22 to 32. Employment rose from 13 to 23. Forward orders rose from 14 to 23. Stocks rose from 5 to 11. Exports also improved from -1 to 0.

                            According to Alan Oster, NAB Group Chief Economist “Business conditions were still in negative territory in Q3 2020, and now, three quarters later, they were at a record high, a testament to how rapid the recovery has been from last year’s recession”.

                            “A pleasing aspect of the survey is how broad-based the strength in conditions and confidence was – whether you look by industry or by state they are all above average, and in many cases well above.”

                            Full release here.

                            Gold back below 1800, but staying in range

                              By
                              ActionForex.com
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                              Gold drops notably again today, and it’s back below 1800 handle at the time of writing. Though down is still contained above 1791.45 support. Focus will remain on this support level. As long as 1791.45 support, rebound from 1750.49 is still in favor to resume. Break of 1833.91 will target 61.8% retracement of 1916.30 to 1750.49 at 1852.96.

                              However, firm break of 1791.45 would likely resume the decline from 1916.30. Further break of 1750.49 would confirm this bearish case and target 1676.65 support again.

                              Australia Westpac leading index dropped to 1.34, RBA to use flexibility in asset purchases

                                By
                                ActionForex.com
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                                Australia Westpac leading index slowed from 1.68% to 1.34% in June. The index peaked at 5% back in November last year and then gradually fallen back. It’s still comfortably above zero and signals outlook for above trend growth. Still, Westpac expected -3.1% contraction in GDP in Q3 in New South Wales and -0.1% in Victoria due to renewed lockdowns.

                                Westpac added that RBA would be advised of significant downward revisions for Q3 growth at the meeting on August 3. It said it’s an “appropriate time” for RBA to use the “flexibility” on asset purchases. At the least it could announce to defer the tapering from AUD 5B to AUD 4B a week, which is scheduled to start in September. Further, “a decision to immediately lift purchases to $6 billion per week would certainly send the right signal that the Bank is responsive to economic developments and is prepared to use its new flexible policy tool accordingly.”

                                Full release here.

                                Australia retail sales dropped -1.8% mom in Jun on return to restrictions

                                  By
                                  ActionForex.com
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                                  According to preliminary estimate, Australia retail sales dropped -1.8% mom or AUD -515.1m in June 2021. Comparing to June 2020, sales rose 2.9% yoy. Victoria (-3.5 per cent) led the state falls in June, with the impact of the state’s fourth lockdown more pronounced in June than May (-0.9 per cent). New South Wales (-2.0 per cent) and Queensland (-1.5 per cent) also fell due to stay-at-home restrictions and reduced interstate mobility.

                                  Ben James, Director of Quarterly Economy Wide Surveys, said: “June’s fall in turnover was due to the impact of coronavirus restrictions across multiple states. Victoria saw restrictions from the start of the month, which were gradually eased from the 11th of June.  New South Wales, in particular Greater Sydney, saw stay-at-home orders issued towards the end of the month.  Other states and territories saw interrupted trade due to mini-lockdowns, as well as reduced mobility between states with the tightening of border restrictions.”

                                  Full release here.

                                  Japan exports rose 48.6% yoy in Jun, 4th month of double-digit growth

                                    By
                                    ActionForex.com
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                                    Japan’s exports rose 48.6% yoy to JPY 7220B in June. That;s the fourth straight month of double-digit growth, even though it’s largely exaggerated by the pandemic plunge last year. By destination, exports to China jumped 27.7% yoy, led by demand for chip-making equipment, raw materials and plastic. Exports to US also rose 85.5% yoy, driven by cars, auto parts and motors. Imports rose 32.7% yoy to JPY 6837B. Trade surplus came in at JPY 383B.

                                    In seasonally adjusted terms, exports rose 2.4% mom to JPY 7040B. Imports rose 4.0% mom to JPY 7130B. Trade balance turned into deficit of JPY 0.09T, versus expectation of JPY 0.02T surplus.

                                    BoJ Masayoshi: Inflation sluggish and powerful easing necessary

                                      By
                                      ActionForex.com
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                                      BoJ Deputy Governor Amamiya Masayoshi said speech, an uptrend in private consumption is expected to “become evident” as the impact of COVID-19 wanes gradually and employee income increases”. The “virtuous cycle” in the “corporate sector” will spread to the “household sector”, and “intensifying the cycle in the overall economy.” Nevertheless, the baseline scenario entails “high uncertainties” with risks “skewed to the downside” on the spread of variants. But activity could improve more than expected as vaccine rollout accelerates.

                                      Masayoshi also said that it will “take time” to achieve price stability target of 2% inflation. He added, “while the inflation rate has risen clearly of late in the United States and other countries, it has been sluggish in Japan.” Giver this, “it is necessary for the Bank to persistently continue to conduct powerful monetary easing with a view to achieving the price stability target.”

                                      Full speech here.

                                       

                                      US building permits dropped to 1.598m in June, housing starts rose to 1.643m

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                                        ActionForex.com
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                                        US building permits dropped -5.1% mom to 1.598m annualized rate in June, below expectation of 1.690m. It’s nonetheless 23.3% above June 2020 rate of 1.296m.

                                        Housing starts rose 6.3% mom to 1.643m annualized rate, above expectation of 1.590m. It’s also 29.1% above June 2020 level of 1.273m.

                                        Full release here.

                                        NZD/USD downside breakout, heading to 0.68 handle

                                          By
                                          ActionForex.com
                                          -

                                          NZD/USD finally follows other commodity currencies and breaks out to the downside today. Overall risk-off sentiments overwhelm speculations of RBNZ rate hike. Technically, fall from 0.7463 is seen as a correction to whole up trend from 0.5467. Outlook will stay bearish as long as 0.7104 resistance holds. Next target is 100% projection of 0.7463 to 0.6942 from 0.7315 at 0.6794.

                                          For now, we’d look for strong support around 38.2% retracement of 0.5467 to 0.7463 at 0.6701 to complete the correction. But we’ll keep monitoring downside momentum, as well as development in the risk markets closely, to reassess the outlook.

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