Daily summary: Markets are gearing up for another major event

9:14 pm 31 August 2021

  • Inflation in the Eurozone above expectations
  • Consumer confidence in the US fell sharply
  • US indices retreat from record highs

Inflation in the euro zone surprised with the reading at 3.0% YoY for August against expectations of 2.8% YoY. This prompted comments from one of the ECB's members Holzmann, who said the central bank should start considering scaling back emergency bond purchases and focus on tools that would help achieve its 2% inflation target sustainably. This, in turn, did not appeal to investors from the stock market. Also travel stocks have taken a hit after the EU recommended a pause on all non-essential travel from the US amid a Covid-19 surge. Elsewhere, weak PMI data from China added to signs of a slowdown in the world's second-largest economy but also boosted hopes of more stimulus. The DAX failed  to stay above 16,000 pts and recorded a solid daily loss.

Also US indices retreated from record highs partially due to mixed macroeconomic data. On the one hand, rising property prices have brought back concerns about early tapering. On the other hand, the consumer confidence index plunged sharply. The Conference Board announced on Tuesday that the consumer confidence index fell to 113.8 in August, the lowest reading in six months. The previous reading was 129.1 in July (revised to 125.1). Today's reading  came in well below analysts' estimates of 124.0. Looking at the components, expectations fell to 91.4 from 108.4 (revised to 103.8). The current situation index fell to 147.3 from 160.3 (revised to 157.2). US consumers also seem to be tired of the Fed's reassurances that inflation is temporary as today's report showed that annual inflation expectations jumped to 6.8% from 6.6%, the highest since 2008!

Gold price remains high in anticipation of Friday's labor market data. In turn, crude oil is also trading near the recent local highs. On the one hand, we have a massive decline in production in the US due to the hurricanes, and on the other, the likely further increase in production by OPEC +, although in line with earlier plans. However recent information points to rising demand from China.

GBPUSD pair launched today’s session higher, however buyers failed to break above resistance at 13790, which coincides with 200 SMA ( red line). Pair is currently testing EMA100 (purple line). Should break lower occur, then downward move may accelerate towards the lower limit of the triangle formation around 1.3620. Source: xStation5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Share:
Back

Join over 1 600 000 XTB Group Clients from around the world.