EUROPEAN DATA DRIVE HEADLINES ON MONDAY
A steady stream of economic data will make its way through the financial markets on Monday, with European releases expected to make the most noise.
Action begins at 06:00 GMT with German industrial production figures. Germany’s factory output is forecast to climb 0.3% in June, after rising 1.2% the previous month.
At 07:15 GMT, the Swiss government will release the monthly consumer price index (CPI), the most closely-watched barometer of inflation. CPI is forecast to decline 0.3% in July, which translates into a year-over-year gain of 0.3%.
Attention shifts to sentiment data at 08:30 GMT with report on Eurozone investor confidence. The Sentix consumer confidence index is expected to fall to 27.8 in August from 28.3 the previous month.
In North America, the Federal Reserve will release its monthly labor market conditions index at 14:00 GMT. On Friday, the Labor Department said US employers added 209,000 workers to payrolls in July, far exceeding forecasts calling for 180,000. The unemployment rate dipped to 4.3%, matching a 16-year low.
Later in the session, the Fed will also report on consumer credit change for the month of July.
In monetary policy, Federal Reserve Bank of Minneapolis President Neel Kashkari will deliver public remarks at 17:25 GMT. Kashkari is a voting member of this year’s Federal Open Market Committee (FOMC).
Solid jobs numbers lifted the US dollar to one-week highs on Friday. The dollar index (DXY) was last down 0.2% at 93.35.
The euro regained momentum on Monday after declining sharply at the end of last week. The EUR/USD exchange rate advanced 0.2% to 1.1793. Prices face immediate support at 1.1735, which corresponds with the 38.2% Fibonacci retracement of the 2014-2017 decline. On the opposite side of the spectrum, immediate resistance is found at 1.1909, the high from 2 August.
The British pound was off to a stable start on Monday following sharp declines in each of the last two sessions. The GBP/USD exchange rate is well off yearly highs after the Bank of England (BOE) voted to keep interest rates on hold. Only two Monetary Policy Committee (MPC) members voted to raise interest rates, compared to three members who did the same back in June. Cable faces immediate support at the psychological 1.3000 level. A break below that region would expose 1.2930, which is the low from 20 July. On the other side of the ledger, the 2017 high of 1.3266 offers a major long-term resistance.
Gold prices took a nosedive on Friday, as a surging dollar pressured commodity prices. Bullion has declined in each of the last three sessions. The yellow metal remains rangebound, which means investors can expect prices to continue oscillating between $1,200 and $1,300 for the foreseeable future.