- 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!
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Open account Try demo Download mobile app Download mobile appGold 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
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