USD: Jackson Hole Meeting
EUR: Germany figures tomorrow
GBP: Rate Hike votes tallied
CAD: Retail Sales

China is the big concern, the catalyst for recent market volatility. When China first cut their rate band, effects weren’t really felt in other markets. It was really only commodity markets, and these plunged swiftly and surely (you can read about that initial reaction here). Now concerns of how the slowdown in China will affect other markets is spilling into them, bathing stock markets and emerging market currencies in red.

How far the effects will be felt is anyone’s guess. It might simply be the stimulus for a change of attitude regarding how strong certain economies really are, and how far out of recession they have really come…

Global stock markets yesterday via Financial Times app

The USD is eyeing a significant release of data this week, as well as a significant annual meeting at Jackson Hole. From existing home sales on Tuesday and durable goods orders on Wednesday, traders and economists will look for strong numbers to bolster claims of a strengthening U.S. economy. On Thursday the Jackson Hole Symposium, an annual meeting of distinguished economists and central bank executives, will begin and last into the weekend. On the same day we will get a reading of the annualized Q2 GDP numbers.

The Jackson Hole Symposium will have a heavier-than-usual weight this year. The U.S. stock markets started to slide significantly last week, and worries about China, commodities, and overpriced bond markets persist along with the questions of rate hike trajectory going forward and a debt situation that will be coming into the headlines by October. Wall Street will hang on every word of these financial titans either for reassurance or for confirmation. Tuesday housing numbers were far from strong, while confidence came in much higher than expected. The disparity between these will likely be felt in coming weeks.

Image via WSJ

The euro has been the big benefactor of the USD’s fall from grace, rising over 4.4% in the past five days. International money that has been flowing into the USD as a safe haven against tumultuous market conditions in Asia and Europe are reversing course, spooked by the steep stock market declines of late. Since the effects of China’s slowdown are in clear focus, the effect this will have on Germany will be very important to investors. Germany’s revised GDP will be important to watch tomorrow, but IFO business climate will be unusually important. These expectations are for the next six months, so if the readings are low it will mark low expectations for the Eurozone’s most important (by far) economy. A low reading would send huge reverberations around the markets.

In a similar vein, business expectations and consumer confidence indicators for the Eurozone will be released Friday. Low numbers could affect the euro significantly, but will almost assuredly affect other markets as well.

Weekly EURUSD via Financial Times app

GBP will see another rate hike vote on Wednesday. As in last month, expectations are not that a majority will vote to see rate hikes. The consideration is simply how many will join the raise mindset.

CAD has been one of the countries hardest-hit by the China commodity fall out. WTI crude has fallen to its lowest level since 2009. It seems as if all the oil-producing nations will continue pumping out black gold until something breaks. The Bank of Canada will release retail sales figures on Thursday. Wholesale figures were up quite a bit last month, so economists will be looking to see if that spills into the retail side. Next week will be a big one for Canada, but more on that later.




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