Summary:
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Services PMI may be the last chance for the pound
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The US trade balance deficit expected to deepen in July
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Bank of Canada widely anticipated to stay on hold today
Investors will be offered a wide array of data throughout Wednesday. The marathon will be launched by the UK services PMI reading that will be followed by the retail sales data from EMU half an hour later. In the early afternoon US and Canada will release trade balance figures that may be more significant to the markets given ongoing trade disputes. Later on, Bank of Canada will announce its rate decision. Last but not least, API oil stocks data will be released in the evening.
9:30 am BST - UK, Services PMI. Both manufacturing and construction PMI from the UK disappointed investors this month. The last reading, concerning services sector, will be released today and it is the last chance to save the pound ahead of the Bank of England meeting scheduled next week. However, it looks like BoE will be on hold until Brexit occurs therefore next week’s meeting is likely to be a non-event. Economists surveyed by Bloomberg point for a minor uptick from 53.5 pts in July to 53.9 pts in August.
10:00 am BST - EU, Retail Sales for July. Retail sales readings from EMU have greatly deteriorate after surging to 3.9% YoY in November 2017. We have seen gradual deterioration in next months and today’s reading is expected to show a 1.3% YoY increase against previous 1.2% YoY advance. Apart from that, one hour earlier (9:00 am BST) final PMI readings for the euro area will be released. However, final readings seldom tend to differ significantly from the preliminary data therefore it is unlikely that we will see any bigger price movements in the aftermath.
1:30 pm BST - Trade balance for July from Canada and US. As the US is still fighting a trade battle with China and the US-Canada ties in regard to NAFTA deal are still put under question the trade balance data may attract some attention. The US trade balance for July is expected to show deficit deepening to 47.6 billion USD (46.3 billion USD in June) while the Canadian data should show deficit rising to 1.2 billion CAD against 0.63 billion CAD deficit previously.
3:00 pm BST - Bank of Canada decision. Given that BoC is often following into Fed footsteps when it comes to the monetary movements it is unlikely that we will see any change in the level of interest rates today as the US central bank will meet on 26th of September. Indeed, money market assess probability of a rate hike during today’s meeting at just 9.2%. However, as Fed will probably rise rates in September odds for hike in Canada during next meeting (October) stand at 82.1% at the moment.
9:40 pm BST - US, API crude oil stock. The oil data will come with a one day delay this week due to the holiday that took place in the US on Monday. The latest rally on the oil market brought Brent prices to the vicinity of $79.75 handle before reversing while WTI managed to climb to above $71. Today’s data is expected to show a 1 million barrel increase in the oil inventories and may serve as a hint ahead of tomorrow’s DOE report.
Central bank speakers scheduled for today:
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9:30 am BST - ECB’s Praet
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2:20 pm BST - Fed’s Bullard
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9:00 pm BST - Fed’s Kashkari
USDCAD managed to climb back above the uptrend line. Moreover, the pair surpassed the downtrend line later on and may be set for a period of gains. Source: xStation5
