PMI DATA IN THE HEADLINES ON WEDNESDAY
Economic data will continue to drive headlines on Wednesday, with IHS Markit scheduled to release a batch of PMI data covering the United States and Eurozone. At the same time, monetary policy will also be on the radar ahead of the annual Jackson Hole Symposium.
At 07:00 GMT, European Central Bank (ECB) President will deliver a speech that will be closely watched by the financial markets. The central bank is widely expected to signal for policy tightening in the not-too-distant future after the euro area economy surpassed expectations through the first half of 2017.
On the data front, Markit will begin releasing its monthly purchasing managers’ index (PMI) beginning at 07:00 GMT. The France manufacturing, services and Composite PMI reports are scheduled at 07:00 GMT. Over the next hour, Markit will unveil PMI data for Germany and the broader euro area.
Germany’s Composite index, which measures manufacturing and services activity, is forecast to hold steady at 54.7. The Eurozone Composite PMI is expected to come in at 55.4, unchanged from the previous month.
The North American session begins with commentary from Federal Open Market Committee (FOMC) member Robert Kaplan, who will be participating in a moderated Q&A session in Texas.
At 13:45 GMT, Markit will release the latest batches of US PMI data. The nation’s manufacturing industry is forecast to gather pace in August. Meanwhile, the services sector is expected to grow at a moderate pace.
In a separate report, the Commerce Department will issue new home sales data for the month of July. New home sales, which are a much more volatile segment of the housing market, are expected to rise 0.3% from June to reach a seasonally adjusted annual pace of 612,000.
Energy traders will also keep a close eye on weekly inventory data from the US Energy Information Administration, which are due at 14:30 GMT.
The euro lost momentum on Tuesday, with the EUR/USD falling back below 1.1800. The losses were triggered by a resurgent US dollar, which rose sharply against a basket of world peers. The pair faces immediate support at 1.1661, which is the low from 17 August. Immediate resistance is located at 1.1828, which is the high from 11 August.
A stronger dollar weighed on the British pound on Tuesday, as cable fell to fresh eight-week lows. The GBP/USD briefly touched 1.2805 before consolidating slightly higher. A clean break below 1.2810 would favour a bearish extension that could send prices back down towards 1.2700.
Oil prices stabilized on Tuesday after a volatile start to the week. US West Texas Intermediate (WTI) was trading lower during the Asian session, with prices hovering around $47.70 a barrel. The outlook on crude is neutral, with the RSI hovering below 50 and the MACD just above the zero line.