FOREX
After touching a multi-month maximum at the end of last week, the US dollar started the week on the back foot and continued to edge down during early Tuesday trading. However, the greenback’s losses have been small, and the dollar is still close to last week’s maximums. Jerome Powell left a clear message when he spoke at the Jackson Hole symposium, saying that inflation remains a problem and leaving the door open for further interest rate hikes. This moderately hawkish stance is positive for the dollar, and we should not be reading too much from this early week softness, which is likely to be the result of some traders locking in gains ahead of the release of important US economic data this week, including consumer confidence, GDP, and employment.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European shares climbed higher on Tuesday, extending the bullish sentiment registered during the Asian session, ahead of key data this week.
Most benchmarks traded significantly higher in the Eurozone, led by real estate, basic materials and energy shares, as investors welcomed the latest announcement from China, which pledged to provide further stimulus measures towards its economy.
However, this wind of relief from the second biggest economy in the world may be the calm before the storm as traders brace for a crucial week on the macro data front.
In addition to today’s US consumer confidence data, investors are likely to focus on US unemployment growth, PCE data, and the highly awaited August NFP release on Friday. Furthermore, volatility is expected to remain high towards EU shares as investors await inflation prints from the Eurozone to get more clues about the future of monetary tightening from the ECB.
With lingering questions about monetary policies, many investors may be tempted to bring significant adjustments to their portfolio’s exposure to riskier assets, depending on the tone provided by this week’s batch of data.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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