In the dynamic world of financial markets, staying informed about the latest news is akin to navigating with a compass in uncharted waters. News, like a steady stream of insights, propels the decisions of traders and investors, sculpting market landscapes and guiding financial strategies.
According to Daily Forex, in the first week of August 2023, here are some important news and data releases you can consider highlighting in your weekly trading
Deteriorating Market Sentiment
Market sentiment has taken a big hit recently, with a notable decline in optimism. This happened
mainly because of two reasons. First, Fitch downgraded its credit rating for the US, which made investors worried. Second, many people feel that the market has gone up too much and is due for a big drop. On top of that, it’s August now, and historically, people are not as optimistic in this month. All these factors combined have made traders and investors more cautious and careful with their decisions in these uncertain times.
Awaiting US CPI Data for Potential Bullish Boost
Currently, there is not much more to add about the market’s present state. After this bearish retracement subsides, there is a possibility that the recent months’ rallies might resume. However, considering historical seasonality, this resurgence may not occur until September. The focus now turns to the upcoming release of US Consumer Price Index (CPI) data, which could potentially inject a more bullish momentum into the market.
Bank of England’s Rate Hike
The noteworthy event in the Forex market last week was the anticipated 0.25% rate hike by the Bank of England, raising the interest rate to 5.25%. Although widely expected, the decision was viewed as slightly hawkish due to more members voting for the hike than anticipated. Additionally, two members advocated for a larger 0.50% rate increase. The Bank of England’s stance suggests it might emerge as the most hawkish major central bank, especially given the persistently high inflation in Britain.
Anticipating US CPI Data
The market is expected to open the week with a continuation of risk-off sentiment and a stronger US Dollar. This scenario is likely to persist until Thursday’s release of US Consumer Price Index (CPI) data, which is projected to show a slight increase in annualized inflation from 3.0% to 3.3%, with a monthly rise of 0.2%. If the data comes in lower than expected, it could trigger a shift in market sentiment, leading to a potential recovery in risk appetite.
Last Week’s Data Releases
- US Non-Farm Payrolls, Average Hourly Earnings, and Unemployment Rate: These figures fell short of expectations, except for Average Hourly Earnings which recorded a 0.4% month-on-month increase.
- US JOLTS Job Openings: Met market expectations, indicating stability in the US job market.
- Chinese Manufacturing PMI: Aligned with expectation, reflecting a steady manufacturing sector in China.
- Australian Cash Rate and Rate Statement: The Reserve Bank of Australia surprised markets by not implementing an expected 0.25% rate hike, contributing to a further decline in the Australian Dollar.
- Swiss CPI (Inflation): Met market expectations, indicating stability in Swiss price levels.
- US ISM Services PMI: Met expectations, pointing to consistent performance in the US services sector.
- US Unemployment Claims: Stayed in line with expectations, reflecting a relatively stable labor market in the US.
- US ISM Manufacturing PMI: Met expectations, reflecting steady growth in the US manufacturing sector.
- Canadian Unemployment Rate: Matched expectations, indicating a steady labor market in Canada.
- New Zealand Unemployment Rate: Slightly exceeded expectations, suggesting a slight uptick in unemployment in New Zealand.
The news presented on Prime Codex is solely those of the analysts quoted. They do not represent the opinions of Prime Codex on whether to buy, sell or hold specific pairs. Traders are advised to conduct their independent research before making an investment decision.