During the transactions of Tuesday, August 1, 2017, the markets will focus on economic agenda’s data announcements, which usually creates changes in the price movements – the economic agenda is considered a key fundamental analysis tool to predict market performance-. Therefore, caution is recommended until these actual data results are known, in order to make an informed trading decisions. Today’s economic news are:
Australian Rates Announcement: markets suggest strongly that the rates will remain without change at 1.50%. The Australian monetary policy statement in the meeting is not expected to have a strong reaction on the Australian Dollar performance, as the RBA didn’t present any hints suggesting new policy tightness and rates increase. Recent comments from the bank’s governor “Lowe” suggests that the fundamental policy stance will be neutral, despite that the statement will remain important for the fundamental policies expectations and market confident. Markets are also at high alert after the Australian Dollar have reached a record top at $0.80. This level provoked rhetoric intervention from the RBA, although this is the first time to happen under the supervision of Governor Lowe. In the context, Lowe’s comments will be very crucial in market sentiments.
UK Manufacturing PMI: it is known that the manufacturing and services sectors are the drivers for UK economy. In the index, any reading above 50 indicates an expansion in the sector, and any reading below 50 indicates contraction. It is expected that the index will see a modest increase to 54.4 from 54.3 last month.
US Core Consumer Spending Index: This index is highly important and closely watched by the Federal Reserve to measure inflation levels in the country. The index measures the goods and services consumed by people and on what levels of consumptions, and that is the core difference between this index and the Consumer Price Index. Expectations are that the index will remain around 0.1% without change.
US ISM Manufacturing PMI: This index measures the performance of the industrial sector of the world’s biggest economy. Any gains above 50 in this index will indicate improvement and recovery in the sector and any movement below that mark would indicate contraction. It is expected that the index will fall back to 56.4 after a bullish reading around 57.8 last month. The index is a survey including around 400 purchase managers, in which participants are requested the evaluate the relative level of work conditions, including the workforce, production, new orders, prices, supplier delivers and inventories.
General confident in the US expectations might be vanishing during last few weeks, and the recent ISM data will be an important factor of fundamental confidence. Regional data suggests continuing the underlying consistent tone, even with some evidences of slower growth in some surveys. Markit PMI survey also indicated that the growth was stronger during July. Companies’ data should enforce confident in general expectations and to keep the economy on the right track towards stronger growth, while the key monthly decline would lead to uncertainty again.