Once again, the rise in government bond yields is acting as the catalyst for the sell off in stocks.
As usual, markets are looking to the US non-farm employment data on the first Friday of each month to monitor labor market improvements and the impact on the Federal Reserve rate hike. The Bank of England and the Reserve Bank of Australia will also be in the spotlight. Below are the highlights of the week's important economic data.
This week, there has been a lack of significant economic data. The start was in Australia, when inflation figures slowed in the second quarter of 2017 unexpectedly, with the consumer price index rising 1.9% year-on-year, while rising 0.2% quarter-on-quarter. The Australian dollar rose throughout the week against the US dollar, to a two-year high of 0.8064.
We will have a new trading week, events and new economic data. This week, the focus will be on the USD and some events that will have a direct impact on it and whether it will recover or continue to weaken after failing to pass the health care law and market uncertainties about Trump's ability to achieve his electoral promises. Discover the most important market drivers during the week:
This week witnessed several important economic data and events that had a significant impact on market movements. The following are the highlights of these movements and their reasons:
The Australian dollar bounced higher again to opening levels after falling in early trading, following Australian labor market data, which came within the expectations adding 14,000 jobs in June and participation rate rose to a 17-month high of 65%. The reason of declining of AUD is the downward revision of the employment change index and unemployment rate. The AUDUSD is now approaching its daily high of 0.7988, which is also its highest level in more than two years.
The economic calendar was not full of major economic events today. Most of the moves was in the trading range since of the beginning of the week, as markets awaiting a number of economic data tomorrow, as the Bank of Japan's monetary policy decision is likely to remain unchanged, plus that markets will also be looking closely at the ECB's statement and whether Draghi will give any hint on tightening monetary policy or easing the monetary easing program.
The Reserve Bank of Australia (RBA) showed optimism for the Australian economy to grow in the second quarter of 2017 as the bank's decision to hold interest rates at 1.50% at its historic low earlier this month as consumption growth recovered despite pressure from high levels of debt. The Australian dollar rose strongly against the US dollar, reaching a two-year high of 0.7942.
Asian stocks rose today to their highest level in two years, supported by the unexpected growth of the Chinese economy. Chinese stocks managed to erase their sharp losses at the start of trading after data showed the growth of the second largest economy in the world slightly stronger than expected at 6.9% This is due to strong industrial production, which recorded the highest rise since April 2016, as well as retail sales and exports.
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