A busy day with the end of the month and the end of the quarter also in the spotlight
The writers have become lazy again.
The unleashed dollar was the big story in trading yesterday as the focus on month end and quarter end keeps the dollar favorable before today’s trade ends. Citi’s model predicts that the dollar will outperform – even more against the yen.
As much as the market has shown a pretty consistent theme from trading last week for the most part, the type of trading conditions that the end of the month and the end of the quarter bring to the table is one that can best be described as complicated and messy. .
This is never a good thing for traders in general, but if there are big moves at the London level, they can be expected to fade afterwards.
But in the case of the dollar this time around, it’s difficult. EUR / USD is on the verge of another breakout below 1.1600 and USD / JPY challenges key resistance at 112.00 while we also saw AUD / USD break below short term support around 0.7220-30 .
Meanwhile, GBP / USD still has some downside as sellers are arguably aiming for the 1.3200 level and USD / CHF is at its highest since April, breaking above 0.9300. .
As such, technical considerations will also be key when evaluating dollar movements, but once the dust settles I would expect the focus to be on US prices again. energy and bond yields to dictate the state of the market.
0600 GMT – Final UK GDP figures for the second quarter
The preliminary report is available here. Q2 data is only a distant memory so it doesn’t have much impact as the market is more focused on the outlook amid the slowing recovery heading into Q4 at the moment. .
0600 GMT – UK September House prices nationwide
The previous version can be found here. UK house prices are expected to rise again, reaffirming stronger conditions in the housing market that continue even after the stamp duty holiday expires in June.
0645 GMT – France September preliminary CPI figures
The previous version can be found here. Much like elsewhere in the region, French inflation is expected to rise further this month, reaffirming mounting cost pressures in general.
0700 GMT – Switzerland September KOF Leading Indicator Index
The previous version can be found here. The reading measures future trends in overall economic activity in the Swiss economy.
0755 GMT – Germany, change in unemployment rate in September
The previous version can be found here. German labor market conditions have shown a decent improvement for a number of months now and the trend is expected to stay that way, although the impact of the leave scheme still needs to be addressed in order to get a more accurate picture of progress. .
0900 GMT – Euro area unemployment rate in August
The previous version can be found here. The unemployment rate in the eurozone is expected to fall again, reaffirming further improvement in labor market conditions, but it will take time for general conditions to reflect a more accurate picture, so there is this to consider.
1200 GMT – Germany Preliminary September CPI figures
The previous version can be found here. Estimates predict that headline annual inflation in Germany will reach + 4.2% year-on-year, with the EU’s harmonized reading standing at + 4.0% year-on-year. This will only reaffirm new and increasing price pressures in the country – similar to those in the region – although in the case of Germany, the reduction in VAT in 2H 2020 also plays an important role in terms of basic effects, so there is still some “noise” in the data.
That’s all for the upcoming session. I wish you the best of the days ahead and good luck in your trading! Stay safe there.
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