Market Update
- July 16, 2024
Readings from the ECB bank lending survey sending mixed signals. Demand continues to fall for businesses in the Euro zone while household lending saw its first increase since 2022. A combination of improving housing markets, consumer confidence and increasing spending on durable goods is the was the main factors for a stronger demand. Cause the reading headed in two different directions for businesses and household markets have been unchanged in this morning session. At 10am we will see the latest update from Europe’s and Germany’s ZEW economic sentiment index. This index is a measurement for level of optimism on economic development for the region. Forecasting is that we will se declines for both the Euro Zone and Germany, that could potentially cause downward pressure for the EUR.
Recent market performances have seen CAD (Canadian Dollar) losing momentum to major currency pairs ever since they lowered their interest rates levels in June. At 1.30pm today we will see their most recent core and inflation level readings. Markets has opened this morning gaining versus CAD, suggesting that it can cause disinflationary pressure on both CAD and BoC. Bank of Canada is already feeling the heat after its recent monetary decision and if data suggest that its timing was incorrect – we could see further CAD weakness.
In this afternoon session, at 1.30pm to be precise, we also have retail sales MoM (month-on-month) from the US. USD has recently taken losses against the GBP and EUR, seeing signs of difficulties in the US for both economic activity and a down spiralling job market. Retail sales are forecasted to decrease from 0.1% in May to 0% in June, which would not be a surprise since unemployment numbers are increasing – causing less disposable income for households.