The U.S. Dollar kept on improving against its peers as markets digest positive earnings and the likelihood that central bank policy will keep helping the risk-appetite
Overview
S&P 500 Index companies have been faring well in reporting earnings with expectations being exceeded by 9.1% Companies in tech such as Palantir and pharmaceutical giant Pfizer added to the chorus of companies also seeing profit and upwardly revising their forecasts. Meanwhile, on the other side of the pond the fact that European firms are missing estimates is deflating the advancement seen experienced earlier this year. The contrast in prosperity is now aiding the Buck’s strength.
Tariffs remain crucial following the August 1st deadline for many nations with Switzerland sending its President and Economy Minister for negotiations in Washington later today. The officials hope their proposals convince the administration to lower the current 39.0% tariff imposed on Swiss goods coming in. Oil prices fell further as anxiety grows over Russian supplies with the White House looking to penalize India for buying Moscow’s barrels. Overall, the globe seems tense while data is not painting a picture of growth like earlier in the year. For now, the Buck is on top, but its momentum has slowed down a bit.
What to Watch This Week…
- S&P Global U.S. Composite PMI 9:45AM today
- Monex USA Online is always open
The complete Economic Calendar can be found here.
EUR ⇓
The Euro fell this morning following indicators showing that the European Central Bank may have room to cut into interest rates after skipping doing so for the first time all year at their July meeting. Services Purchasing Managers Index for July came in slightly lower than expected and showed it has been expanding at a slower pace from prior’s months. Perhaps now suppliers will act with more caution. June’s Producer Price Index meanwhile revealed that inflation for suppliers is quite tamed at 0.8%, which could convince ECB members to once again cut to stimulate growth without fearing out-of-control inflation. The shared currency lost 3.3% of its value in July and could see further losses if the pessimism surrounding it continues.
MXN ⇑
The Mexican Peso is one of the few exceptions today in not dropping against the dollar after mixed data figures. May’s Gross Fixed Investment improved and got back into positive territory at 0.9%, beating a 0.4% estimate. While this is a welcome signal for the Mexican economy, Private Consumption from May was disappointing with a deeper contraction than anticipated at (-1.6%) vs. (-0.2%). It is possible we may get word about a trade deal between the U.S. and Mexico being in the works, but the lack of clarity keeps things volatile
