12.08.24 - 16.08.24
Results of the previous week
| NVDA +13.81 | NQ +5.19% | XAGUSD +3.71% |
VIX -17.97% | BRN -3.11% | SOYBEAN -2.71% |
Last week, US indices continued their recovery from the sharp collapse they experienced on 5 August. In addition to technical factors, they received support from US inflation data. The index fell to its lowest point since April 2021. Weakening price pressures have given markets back confidence that the US Federal Reserve will cut rates at one of its upcoming meetings.
The US dollar suffered losses against most major currencies. The reason lies in the changed expectations for the US Fed Funds rate. It was only on Thursday, after the release of weekly jobless claims data that came in below expectations and strong retail sales statistics that significantly exceeded forecasts, that the US currency was able to recover some of its earlier losses.
Brent crude oil prices made an attempt to develop an upward movement at the beginning of the week, but the growth was restrained by the $82 per barrel mark. For the rest of the five-day work week, energy prices spent between the range of $79.60 and $82.00. Tensions in the Middle East and expectations of a US Federal Reserve rate cut continue to support prices. But at the same time, concerns about energy demand are holding back growth.
Key events of the current week
US Federal Reserve meeting minutes | DATE 21.08 | GMT | FORECAST | PREV. | IMPORTANCE |
The US Federal Reserve kept the rate unchanged at its last meeting, a move that showed caution in its approach to adjusting monetary policy. It is worth noting that the macroeconomic reports released after the meeting did not add optimism about the US economy's prospects. The unemployment rate rose to 4.3%, the highest since December 2021. However, the inflation rate continues to show a gradual downward trend. According to the latest data, price pressures fell to 2.9% year-on-year. Such figures reinforced expectations that the US Fed will go for a rate cut as early as its September meeting. And in the minutes, markets will be looking for confirmation of the possibility of an earlier rate cut. Such expectations are negative for the dollar but supportive of dollar-denominated assets such as gold. In this scenario, XAU/USD may continue to move towards 2520,00. | |||||
Germany Manufacturing PMI | DATE 22.08 | GMT | FORECAST | PREV. | IMPORTANCE |
The industrial sector plays an important role in the German economy. Since August 2022, the index has remained below 50, the mark that separates the growth zone in the sector from the decline zone. The indicator has been declining over the past three months, reflecting the industry's increasingly weak state. This is generally unsurprising given high energy and energy prices and changing supply chains. This has contributed negatively to the GDP growth rate, or rather, its decrease. For 6 quarters, GDP has shown a decline, signalling a recession in the economy. Weakness in the industrial sector of the largest economy within the Eurozone is bad news for the euro. Against this backdrop, EUR/USD may drop to around 1.0900. | |||||
The UK. Manufacturing PMI | DATE 22.08 | GMT | FORECAST | PREV. | IMPORTANCE |
The index has remained above 50 for the past five months, signalling growth in this sector of the economy. At this stage, stability in performance is very important as the UK economy as a whole is still being affected by changing supply chains and high energy prices. The Bank of England has already carried out one rate cut amid reduced price pressures and weak macroeconomic statistics. Signs of a further cooling of the economy heighten expectations of another such move from the British regulator. which is not good for the pound. Against this backdrop, GBP/USD may target a return to 1.2800. | |||||
