EUR / USD, GBP / USD
On Tuesday, the main inflation indices as the macroeconomic indicators from the U.K. came out in the absence of important news from other regions. This determined the main movement of the British currency on Tuesday. The base CPI for August increased from 2.4% y/y to 2.7% y/y while the total CPI jumped from 2.6% y/y to 2.9% y/y as the monthly growth rate is 0.6%. The housing prices rose to 5.1% y/y from 4.9% y/y compared to the forecast of 4.8% y/y. The pound sterling added 120 points.
In France, the number of people employed in the non-agricultural sector increased by 0.4% in the second quarter while the unemployment in Italy fell from 11.6% to 11.2%. These put pressure to the euro as the American market remains optimistic. The number of open vacancies in the US labor market for July was 6.17 million against the adjusted forecast from 6.16 million to 5.96 million. On the other hand, the index of business optimism in small business increased from 105.2 to 105.3 against expectations of a fall to 105.0. The stock market added about 0.3%. Yields on US government bonds rose steadily across the spectrum while maintaining the average expected rate at 1.205% in December.
Despite the visual upward trend, the euro is trading within the trading range for August 28 to 29 which most likely indicates an ever-increasing demand for the US currency because of a new stage of public debt placement through bond placements after the limit has been lifted. In the open market, the $100 billion funds have increased and taking into account the placement of closed state and municipal budgets where several bonds were placed more than $350 billion over several days. The report on public debt is not yet known since the page of the Treasury website is currently not available. However, according to another source, the approximate U.S. debt amounts to 20.165 trillion dollars reaching a historic record. An auction on placement of the 30-year government bonds for 12 billion dollars will be held Today. As they say, the famous counter in Manhattan shows the external debt of the United States.
The investor's attention will now be focused on tomorrow's meeting of the Bank of England. The pound has already reached the upper limit of the range 1.3250-1.3320, and if the expectations in the applications for unemployment benefits expectations are justified, the price today may remain in this range although the forecast assumes a slight increase of 0.6K. The average wage is expected to grow by 2.3% in the last 3 months. Keeping the prices in range is also desirable if the actual value does not exceed this forecast.
The industrial production from the eurozone will be released in July, with a forecast of 0.1% following the previous contraction by -0.6%.
In the US, the producer price index (PPI) for August may add 0.3% against -0.1% in July while the base PPI is expected to grow by 0.2%. The report on the execution of the federal budget for the month of August is expected to have an increase in the deficit to 118.6 billion dollars, which is the worst figure in the last three years in August.
The euro is expected to be traded at the level of 1.1990 which is both slightly higher and lower at a lateral trend.
AUD / USD
Over the past two days, the Australian dollar did not changed in price. The trade is at the technical level of 0.8025. After the tension on the part of North Korea has passed, there are no other external topics for trade, and there were no news, particularly from Australia. On Tuesday, the business sentiment index of Australia fell from 12 to 5 in August while this Wednesday, the consumer confidence index for September increased by 2.5%. Tomorrow, there will be indicators of employment for August, but it is expected to be neutral. The growth of new jobs can increase by 15,000 compared to the previous value of 28,000. The share of the economically active population (65.1%) and the overall unemployment rate (5.6%) are expected not to change.
The U.S. iron ore slightly fell by -0.61% to 74.33 dollars per ton. On the contrary, the prices in China went up by + 2.5%. On the other hand, the price of coal augmented by 0.2% to $ 99.75 while the copper lost -1.2%.
Tomorrow, if the expectations for the publication of Chinese industrial production and retail sales are justified, a shift in sentiment towards purchases will occur especially against the background of increased volatility of the British pound in the "super-four". Forecast for the industrial production in China for August is projected from 6.4% y/y to 6.6% y/y while the retail sales forecast up from 10.4% y/y to 10.5% y/y. We are waiting for AUD/USD at 0.8135.
