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Pound Response to PMI Data Likely Limited as BOE Looms Ahead
DailyFX.com -
Talking Points:
British Pound Unlikely to Find Lasting Follow-Through in July PMI Figures
US Dollar Looks to PCE, ISM Data to Inform Fed Interest Rate Hike Outlook
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July’s UK Manufacturing PMI report headlines the economic calendar in European hours. Expectations call for the index to edge narrowly higher to 51.5 from 51.4 recorded in the prior month, reflecting a slight acceleration in the pace of factory-sector activity growth. The outcome may not inspire follow-through from the British Pound however as traders withhold directional conviction until after this week’s much-anticipated Bank of England policy announcement passes.
Later in the day, the spotlight shifts to US economic data. The ISM Manufacturing gauge is expected to print at 53.5 in July, unchanged from the prior month. Meanwhile, the year-on-year Core PCE inflation gauge – the Fed’s preferred price growth measure – is seen holding at 1.2 percent for a second consecutive month.
The latter may prove to command particular attention as traders consider the implications of persistently sluggish inflation for the prospect of a September Fed rate hike. Indeed, the US Dollar dipped alongside front-end bond yields on Friday as disappointing second-quarter wage inflation data crossed the wires. The Employment Cost index gained just 0.2 percent, the least in at least 18 years.
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Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
23:30 | AUD | AiG Perf of Mfg Index (JUL) | 50.4 | - | 44.2 |
00:00 | AUD | CoreLogic RP Data House Px MoM (JUL) | 2.8% | - | 2.1% |
00:30 | AUD | TD Securities Inflation MoM (JUL) | 0.2% | - | 0.1% |
00:30 | AUD | TD Securities Inflation YoY (JUL) | 1.6% | - | 1.5% |
01:00 | AUD | HIA New Home Sales MoM (JUN) | 0.5% | - | -2.3% |
01:30 | AUD | ANZ Job Advertisements MoM (JUL) | -0.4% | - | 1.2% |
01:35 | JPY | Nikkei Mfg PMI (JUL F) | 51.2 | - | 51.4 |
01:45 | CNY | Caixin Mfg PMI (JUL F) | 47.8 | 48.3 | 48.2 |
05:00 | JPY | Vehicle Sales YoY (JUL) | - | 5.4% |
European Session
GMT | CCY | EVENT | EXP | PREV | IMPACT |
07:00 | CHF | Total Sight Deposits (JUL 31) | - | 461.89B | Low |
07:00 | CHF | Domestic Sight Deposits (JUL 31) | - | 397.63B | Low |
07:30 | CHF | PMI Mfg (JUL) | 50.5 | 50.0 | Medium |
07:45 | EUR | Markit/ADACI Italy Mfg PMI (JUL) | 53.9 | 54.1 | Low |
07:50 | EUR | Markit France Mfg PMI (JUL F) | 49.6 | 49.6 | Low |
07:55 | EUR | Markit/BME Germany Mfg PMI (JUL F) | 51.5 | 51.5 | Medium |
08:00 | EUR | Markit Eurozone Mfg PMI (JUL F) | 52.2 | 52.2 | Medium |
08:30 | GBP | Markit UK PMI Mfg SA (JUL) | 51.5 | 51.4 | Medium |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
EURUSD | 1.0620 | 1.0813 | 1.0899 | 1.1006 | 1.1092 | 1.1199 | 1.1392 |
GBPUSD | 1.5361 | 1.5489 | 1.5556 | 1.5617 | 1.5684 | 1.5745 | 1.5873 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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