Market waiting for news

The absence of important fundamental statistics from both the US and the euro zone forces investors to take a wait-and-see position, forming in the markets side channels, especially in pairs with the euro and the British pound. This week all attention of traders will be riveted to a two-day symposium, which will begin on August 24. It is expected that the main figure will be the president of the European Central Bank, Mario Draghi. It is believed that Draghi will shed light on further actions of the bank in relation to the program of redemption of bonds. I recall that it was at the same conference in 2014 that Mario Draghi justified the need for the start of a quantitative easing program for the euro area, and also announced measures that could lead to an increase in inflation. It is possible that, speaking at the symposium of the Fed in Jackson Hole, Draghi will also announce the curtailment of the above program. If the president of the ECB does not touch upon this topic during his speech, the attention of investors will switch to a meeting in September, where, as expected, the European Central Bank can announce the beginning of the curtailment of quantitative easing. As several leading world economists suggest, this can be done in two stages. In September, the program will be announced to be curtailed, and in October concrete steps will be announced. As for the fundamental data, at the end of last week it became known that the surplus of the current account of the eurozone’s balance of payments in June fell. This is bad news for the European Central Bank. Thus, the current account surplus of the euro area’s balance of payments totaled 21.2 billion euros after the level of 30.5 billion euros in May. The positive balance of trade in goods rose to 27.4 billion euros, and the positive balance of trade in services fell to 2.2 billion euros. Temporary support for the US dollar at the end of last week had data on the indicator of consumer sentiment in the US, which in the first half of August rose. According to the data provided, the preliminary index of consumer sentiment in August 2017 rose to 97.6 points against 93.4 points in July. Economists predicted that the preliminary index in August will be 94.5 points.

The Canadian dollar rose sharply against the US dollar, continuing its trend, which was formed in the middle of the week. Demand remained after the publication of good inflation data, which in July this year grew in Canada. According to the report, Canada’s consumer price index in July 2017 increased by 1.2% compared with the same period last year. Core inflation in July rose to 1.5% against 1.4% in June.

 

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