OANDA Market Insights podcast (episode 27)

OANDA Senior Market Analyst Alfonso Esparza reviews the week’s business and market news with Jazz FM Business Breakfast presenter Jonny Hart.

This week’s biggest stories: US sanctions against Iran, Turkish lira collapse after steel sanctions and market reaction to UK GDP data

Big revisions offset July miss on payrolls

Another strong US jobs report expected today

The PBoC giveth the PBoC taketh

Equities shrug off trade tariff tensions

Is the negotiating table being dusted off?

Was it a storm in teacup? Equity markets across Asia shrugged off yesterday’s post-tariff announcement weakness and are trading in the black through the Asian session. Nikkei225 rose 0.95%, Australian stocks rose 0.68% and even China shares managed gains of 2.30%, recouping all of yesterday’s losses. What has caused this shift in sentiment? Well, China’s Vice Minister of Commerce, Wang Shouwen, urged his US counterparts to resolve the current conflict with a new round of bilateral negotiations. Early murmurings from the US administration could imply that they are amenable to a resumption of talks at a high level, Bloomberg reports.

A tenuous and unstable state of affairs

Currencies lag behind

Currency pairs have halted the risk-off trend started yesterday but have yet to reverse yesterday’s moves to any degree. USD/CNH is posting its first down day in three, but so far has only managed a slide of 0.59% while AUD/USD has recovered 0.28% on the day.

AUD/USD Daily Chart

Source: Oanda fxTrade

US inflation data in the headlights

Today’s data calendar is a mixed bag, with German CPI for June kicking off the European session followed by Euro-zone industrial production for May. Inflation is seen holding steady with the increase expected to be the same as May, up 0.1% m/m and up 2.1% y/y. Factory output is expected to rebound from April’s slump, seen rising 1.2% m/m and 2.1% y/y.

US June consumer prices are seen rising 0.2% m/m and 2.9% y/y while core prices, excluding food and energy are forecast to gain 0.2% m/m and 2.9% y/y. Given that the Fed has said recently that it will not overreact if prices stray above their medium target in the near term, it would require a number significantly different from estimate to provoke a meaningful market reaction.

You can access the full data calendar on MarketPulse at https://www.marketpulse.com/economic-events/

Bank of Canada hikes rates with hawkish outlook