The U.S. Dollar slipped as it keeps swinging back and forth between gains and losses this week.
As summer seems to bring with it a lull in activity, markets are concerned that the recovery is failing, however, stocks remain high and yield down. At the time of writing, all attention is on statements by European Central Bank President Christine Lagarde as she gets through her press conference explaining the importance of new ECB guidance and keeping policy as is.
In terms of economic indicators, we had disappointment in Initial as well as Continuing Jobless Claims which exceeded expectations. We get more data to chew tomorrow in Purchasing Managers Index Composite for July. Expect volatility to continue as the world keeps battling the pandemic while trying to have the main event such as the Olympics.
What to Watch Today…
- No major economic events are scheduled for today
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The Euro is not fluctuating in too broad a range as the ECB wraps up its decision announcement, in which ECB President Lagarde is explaining their need to stay course. The Pandemic Emergency Purchasing Program (PEPP) will continue as a tool to minimize the “downside impact” that COVID has caused. We see more of the same for a while from the other side of the Atlantic since the recovery clearly will take a long time and even longer for the ECB to start tightening.
Feels like Déjà vu as the U.K. is having trouble with the Brexit deal over trade lines through Northern Ireland as main negotiator, David Frost, demanded in statements that the European Union rewrite a new deal. Officials from the EU were explicit about how this will not happen. Sterling as weakened recently and due to the uncertainty that factors such as post-Brexit trade havoc creates. There is not much movement now as a result, but this could haunt GBP.
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