This Tuesday, preliminary July Markit PMI will be out for both, the EU and the US, with most indexes expected barely changed from June’s final readings, somehow suggesting that economic growth has stabilized at positive levels. Beyond scheduled releases, investors are cautiously waiting for any new development related to the trade war, and Trump’s latest criticism of the Fed’s policies.
EUR/USD may turn volatile following the release of the preliminary PMI numbers today, but, the range breakout is more likely to happen after Thursday’s ECB rate decision. After the US Dollar’s worst single day performance in about four months, the greenback put in a partial recovery on Monday with the pair currently trading at 1.1680.
The Japanese yen soared at the beginning of the day, resulting in the USD/JPY falling to 110.74, its lowest since July 9, as the dollar extended its last week’s decline from last week. But during the US trading hours, the greenback recovered due to US Treasury yields, sharply up for the day. This Tuesday, Japan released the July preliminary Nikkei Manufacturing PMI at 51.6, missing expectations of 53.2.
GBP/USD has been trading flat in the Asian session, trapped by continued fretting over Brexit, currently just beneath 1.3100 heading into Tuesday’s London market session. The major pair continues the current trend of slumping into fresh lows. The Sterling has closed lower against the Greenback for three straight months, and is currently on pace to make it a fourth with July leaning into the bearish side. The only GBP-focused release being the low-tier CBI Industrial Trends Survey, coming in at 10:00 GMT.
Oil prices extended declines into a second session on Tuesday as attention shifted to the risk of oversupply, with market participants shrugging off escalating tensions between the United States and Iran. Earlier in Monday’s session, the market had risen after President Donald Trump warned of dire consequences for Iran if it threatened the United States. The market has also been dented by concerns about the impact on global economic growth and energy demand of escalating disputes over global trade. API’s Weekly Crude Oil Inventories Data is to be released at 20:30GMT.
Gold prices look bearish, as the precious metal reversed its yesterday’s gains against the dollar, now testing the 1220 level. The global trade tensions have affected the yellow metal, in addition to the dollar recovering after a sharp decline in the previous session.