Last week’s news began with Trump dominating market movements, due to the political game of risk and the subsequent impasse with North Korea. As the temperature of the potential conflict was dialled down; from boiling point to simmer, the next self inflicted presidential crisis to effect the markets arrived in the form of clashes, between what’s termed the “alt right” in Charlottesville and left wing political supporters.
Trump failed to condemn the clashes, in which a violent death occurred, he then quickly lost the confidence of many in his two prominent business advisory committees and then subsequently closed the committees down. Market analysis and investors then quickly joined the dots, believing that the intended Trump tax cuts, down to circa 14% from 35%, which is the key policy reason markets have rallied since Trump’s inauguration, are now unlikely to take effect. Evidence once again (if needed), that all currency traders need to keep a weather eye on the behaviour the most unpredictable president the USA has appointed in living memory.
Before moving onto Monday’s key economic calendar events, its worth noting any significant changes in large corporate investors’ medium to long term positions, as indicated by the COT report; the commitment of traders report, released each Friday evening. Traders have increased their net short bets on sterling, reduced their long positions on the euro (after reaching a six year COT position high last week), increased their long/bullish bets on yen, Canada’s dollar saw a reduction in long bets, the kiwi saw a sharp reaction in net longs, the Aussie was close to unchanged, as was the Swissie and longs have increased on the SPX, silver and gold.
Although it reports asking house prices and not sold prices, given that the UK’s middle class are obsessed over house prices and attempting to constantly “move up the ladder”, analysts and the UK’s mainstream media pay close attention to the Rightmove house price index. Rising asking prices do not necessarily reflect confidence in the UK’s housing markets however, it could simply reveal that those with more expensive properties for sale are suddenly rushing for the exits. The volume of houses sold and prices achieved are far more revealing, as illustrated by the ONS data produced each month. The Rightmove survey is expected to reveal a modest rise from the YoY 2.8% published for July, when it’s published Sunday evening Monday morning.
Credit card spending in New Zealand, both MoM and YoY, will be published early Monday morning; the expectation is for the figure of 8.3% YoY growth to be maintained. In the several Japanese data results published, the all industry activity index is the most prominent, and is forecast to rise from its -0.9% fall in May, to a rise of 0.4% in June. Various store sales data is also published, little change is expected.
Swiss data, in the form of money supply, total sight deposits and domestic sight deposits will be released on Monday, although not regarded as high impact data releases, the value of the Swissie can often react to the data as its published.
As attention then turns to North America Canada’s wholesale sales for June will be published, forecast to fall to -0.2% in June, from the 0.9% figure registered in May. From the USA the Chicago Fed national activity index is revealed, as is the result of the auction of two tranches of USD debt, 3 month and 6 month.
