The Bank of England’s Monetary Policy Committee remained in consensus in terms of Asset Purchase Facility and Official Bank Rate votes, but not in terms of forward guidance. The committee voted unanimously in favor of retaining the QE and the bank rate. However, Martin Weale dissented, in favor of a stricter stance with regards above-average inflation.
UK Claimant Count Change has declined for the ninth straight month, decreasing a little over 29,000 in July. Unemployment Rate stood at 7.8 percent for the fourth straight month. Retail Sales increased 1.1 percent, following the prior month’s mild 0.2 percent gain.
In other news, New Zealand posted a surprise increase in the June quarter Retail Trade Survey. According to Statistics New Zealand, Retail Sales rose 1.7 percent, the second strongest reading in the last six quarters. Core Retail Sales was nearly double than expected, 2.3 percent.
The US Empire State and Philly Fed Manufacturing Index both disappointed with readings of 8.2 and 9.3. Analysts were expecting above 10-level readings. The same happened with the Preliminary reading of the University of Michigan Consumer Sentiment, which stood at 80.0 compared to 85.6 expectations by analysts surveyed.
Gold launched the week with a good start and ended in the same fashion, maintaining its stance above the $1,300 level all the way through. With fresh momentum on the side of the bulls, they are ready to tackle remaining bear defense lurking around $1,400. Layer of resistances are scattered through $1,500.
Oil completed the week with five straight days of advances, bringing price closer to fulfilling the expected triple top. There is a potential thick layer of defense around $108-$109, so buyers need to be extra vigilant.
EURUSD managed a V-shaped recovery after blasting higher by more than 150 pips on Thursday, effectively erasing the losses built on the early part of the week. Bulls will surely aim for a trek above the 1.3400 level this coming week.
USDJPY started the week well bid but a significant turnaround happened on Thursday which thwarted a great bullish advance. Based on this price action, it appears bears remain in control; hence bulls need to act with conviction next week in order to significantly reverse the bearish momentum.
GBPUSD led the majors this week as the pair rocketed above the 1.5600 level after breaking away from the sticky 200-day MA which influenced price for a week. Bullish target this week could go as high as 1.5800-1.5900. Before that, June’s 1.5750 high needs to be taken out of the way.
The Week Ahead
The coming week is rather quiet relative to its normal state.
On Monday, there will only be New Zealand’s PPI Input; Japan’s Trade Balance; Australia’s New Motor Vehicle Sales.
On Tuesday, traders will focus on Australia’s Monetary Policy Meeting Minutes; New Zealand’s Inflation Expectations; Germany’s Producer Price Index; Canada’s Wholesale Sales.
Wednesday is unusually quiet, with just a few key releases such as UK Public Sector Net Borrowing and CBI Industrial Order Expectations; US Existing Home Sales and FOMC Meeting Minutes.
Thursday tops the week with the most releases, particularly Australia’s CB Leading Index; China’s HSBC Flash Manufacturing PMI; Eurozone, France, and Germany Flash Manufacturing PMI and Flash Services PMI; US Unemployment Claims and Flash Manufacturing PMI; Canada’s Retail Sales
Finally on Friday, the week winds down with the release of Germany’s Final GDP; UK Second Estimate GDP, Prelim. Business Investment, and BBA Mortgage Approvals; Canada CPI; and US New Home Sales. The Jackson Hole Symposium, to be held in Wyoming, will also start today and is expected to end on Sunday.