Summary:
- ECB’s Draghi is going to take the floor in the morning
- Preliminary PMIs (both services and manufacturing) from all around the world
- Oil inventories data is worth looking at in the afternoon
The economic calendar is packed with many significant releases with an appearance of Draghi being a cherry on top before noon. Afterward, we are going to have several notable readings for the US dollar in particular and the data on oil inventories. At the end of the day, FED’s Kaplan is scheduled to speak as well so the greenback could be quite volatile today.
8:00 am BST – Draghi’s speech in Lindau, Germany: Although, Draghi is expected to speak later in the day, markets whisper that his Friday’s speech in Jackson Hole should be more important. Either way, given a recent surge in the euro, the common currency could be prone to respond quite sharply to any Draghi’s remarks. Keep in mind that market participants are likely to look for some hints about a reduction in the bond buying program which could be the EUR-positive. Having said that, should Draghi failed to deliver more hawkish commentaries in that respect, it could exert downward pressure on the currency. Let us notice that even as the official calendar points to 8:00 am BST as the time when Draghi starts his speech, the ECB’s website begs to differ and suggests 8:25 am BST.
Preliminary PMIs (manufacturing and services):
- France – 8:00 am BST
- Germany – 8:30 am BST
- Eurozone – 9:00 am BST
- US – 2:45 pm BST
As far as the European releases are concerned, investors could scrutinize the data looking for possible sings of an economic slowdown. Let us recall that the ZEW survey showed yesterday a substantial deterioration with regard to expectations about the outlook of German growth. For that reason initial prints for August could be especially worth looking at. Having still an elevated level of net longs on the euro, the EUR might be susceptible to larger pullbacks if the data falls short of estimation heralding some softness in growth momentum going forward.
3:00 pm BST – US new home sales: Even though the US housing market has been resilient to higher market rates of late, there is a likelihood that a discernible divergence between the home sales figures (both new and existing) and the 30Y MBA rate might be tried to be closed. If so, it’d suggest larger declines as for home sales or lowering mortgage rates which could soothe anxiousness about financing. On the other hand, let us note that the perceptible slump in the USD could have offset an adverse impact on the home sales stemming from higher mortgage rates. The print is slated to show 612k against the prior month’s 610k.
3:30 pm BST – Oil inventories by the DoE: The API reported yesterday that US stocks of crude oil fell by more or less 3.5mb which proved to be broadly in line with an estimation via Reuters. Even as stocks in Cushing reduced as well, another quite sizable increase of gasoline stocks could be a fly in the ointment. The higher levels of gasoline stocks, the less odds to get deeper cuts of stockpiles in terms of crude oil. The consensus indicates a 3.3mb decrease. By the way, if a change in oil inventories turns out to be widely in line with the API’s report, closer attention could be paid to output give a recent perky bump.
6:05 – FED’s Kaplan speech: That will be a subsequent appearance of FED’s Kaplan during recent days. It has to be noted that he did deliver neither hawkish remarks which would have lifted the greenback. However, given that investors could become more vigilant for comments coming from the FED due to the symposium in Jackson Hole, he could spark some nervousness in the USD.
Meantime, the EURUSD is hanging around a relevant support in the vicinity of 1.1750. Let us remind that this level supported the currency yesterday following quite the disappointing ZEW release. Source: xStation5