The high amounts of volatility continued yesterday with both EURUSD and GBPUSD falling below key levels after a bullish data release from the States. US Core durable goods (excludes the volatile aircraft orders) which is a key indicator of production and therefore the manufacturing sector, was forecast at 0.3% and posted a better than expected 0.6%. The figure shows that corporate spending was finding its footing prior to the turmoil in financial markets.
Rating agency Fitch issued a dovish statement regarding the Chinese economy yesterday. Fitch stated that market expectations for China’s economy may get revised lower and that Chinese authorities still retain room to loosen policy further.
The UK released two pieces of data yesterday. Mortgage approvals and CBI retail sales, both posted slightly better than expected figures. Although the data is only low tier it still paints a positive picture of the UK economy as the housing industry and tertiary sector improves.
The Jackson Hole symposium will be keenly anticipated as it provides a platform for Fed officials to opine on the economy. However, the expected absence of Fed Chair Janet Yellen leaves little room for the Fed to explicitly communicate any intention to raising interest rates in advance of its September meeting. In the afternoon, the US releases its second reading of GDP for Q2, forecasted to be revised up to 3.2% from 2.3% as a result of recent upward revisions seen to June data.