Vang SJC

The world once again pays attention to the release of all-important data from Europeans and the U.S for more signs whether central bank may deploy more stimulus measures or not to booster economy which is drowned in China’s slowdown and the Britons’ choice to opt out the EU.

Today, German has started a day of key data from 19-country eurozone by the country’s Prelim GDP. According to the data from German Federal Statistics office Destatis, German GDP in second quarter, Europe’s largest economy and economic powerhouse, rose by 0.4%, beating economists’ expectations of 0.3% growth. The statistics office said that growth came primarily from expanding exports and domestic consumption. Yet, the gross domestic product in the first quarter ticked up by 0.7%, much higher than the result of 0.3% advance in Q2116 due to weaker net investment, especially in facilities and construction. Moreover, price consumer index for July increased by 0.3%, staying in line with both consensus forecasts and the metrics in June. Meanwhile, whole price index confirmed at 0.2% for the previous month, missing the forecast of a 0.3% upbeat.

The report from European Union’s statistics agency implied that economic growth in the euro zone slowed in the second quarter, after a strong reading in the first three months of the year. The bloc’ gross domestic product (GDP) in the second quarter mounted up by 0.3% from the previous period and rose 1.6 % on yearly basis, matching with the average forecasts of economists polled by Reuters. In the first quarter, GDP in euro area went up 0.6% quarterly and 1.7% yearly. All data were seasonally adjusted. Right after the announcement, the euro was knocked down against its peer, the green back, to the level of 1.11474.

The China’s economy once again disappointed the market with the release of industrial production and retail sales figures. China’s economic activity slowed down in July, with the industrial output expanding by 6%, the slowest pace since March 2016. This suggested that the world’s second-largest economy was suffering a painful process of restructuring its older industrial sectors. The report from National Bureau of Statistics also showed that growth in retail sales cooled to 10.2% in July, from 10.6% in June. This statistics represented a slip from consensus expectation of 10.5% improvement.

More seriously, China’s fixed-asset investment over January to July continued to ease down to 8.1%, following figure of 9% in the January-June period. The index was below 10% for the third consecutive month and the weakest year-to-date growth since December 1999, suggesting that investors remain cautious of the future development of state owned enterprise sector amid painful reforms

The global economy is staggering due to China’s slowdown, given that China has been the biggest contributor to global growth for a long time. Accordingly, possibility for a Fed interest rate increase seemed to be fragile in the investors’ mind, especially amid the currently financial turbulence. The chains of pessimistic data from China this week casted a shadow over the possibility of a Fed rate hike in the upcoming month. Markets are now pricing in a 40% chance by the Fed’s December meeting, down from 50% later yesterday, according to data from CME Group.

Yesterday, the report from Labor Department said that the number of people filing applications for unemployment benefits was little changed last week, solid at 266,000 people. This represented a slight decrease from the reading of 267,000 workers for the week ending on July 29. Also, this data remained the near four-decade low level, which highlighted strength in the job market. Furthermore, San Francisco Fed President John Williams said in an interview with the Washington Post published on Thursday that he showed a great belief that Fed would raise rates this year because of flourishing labor market conditions and the likelihood that inflation is heading higher.

Later today, the Bureau of Labor Statistics will announce the producer price index for July, which is anticipated to arrive at 0.1%. Besides, investors will turn their focus to U.S. retail sales data, which is expected to show a 0.4% monthly increase in July, according to the median estimate in a Reuters poll.

The dollar’s index DXY, tracking the value of the greenback against a basket of six major currencies, edged down 0.1% to 95.82.

eurusd h4

On the H4 chart, the pair is moving in a wide range and currently settling at 1.11549. ADX (14) is heading downwards to 25,7533, indicating that the bullish trend is becoming weaker. Additionally, the moving average line started to bear a shadow over the price chart, suggesting that the bearish trend is in the making. The price is anticipated to consolidate for a while before creating a clear new trend.

Analyses of Group Fiinvesting

Download PFMTools here and check out your trading skill level