Currently, each week can be an interesting week because of the escalating trade conflict between the United States and China. Investors will also be wondering how the trade conflict will affect American companies, because we can already hear about the possible reduction of employment in American companies.
The beginning of August brought very high volatility in many asset classes. From the worst session on the stock market in 2019 to the rally on the bond market and multi-year highs on the gold market. In turn, the price of oil has fallen to the lowest level this year, which caused Saudi Arabia to start thinking about intervention in this market. There are many indications that the current summer holidays may be still exciting for investors.
It is worth paying attention to data from the American economy, especially those regarding inflation (Tuesday, August 13, 14:30). Also Thursday, August 15, will bring a number of publications from the US. In the face of trade war, all data is important, as investors will look for the negative impact of tariffs on business. There is a concern that recent events may worsen sentiment and lead to higher costs. This, in turn, it can make companies more reluctant to invest and hire new employees, which can lead to a economic slowdown.
It will not be possible to ignore the euro zone data either. On Wednesday, August 14 at 11:00, the second-quarter GDP review and industrial production will be published. In turn, on Friday, August 16 at 11:00, the trade balance will be published. Due to recent weak data from Germany, investors will be able to see if the problem of strong economic slowdown concerns only this country or the entire euro area.
Regarding central banks, on Thursday, August 15 at 10:00 the Norges Bank decision on interest rates will be published. Norway is the only country where interest rates have been raised since the beginning of the year despite the deteriorating global situation. Investors will be awaiting a statement in which there may be hints as to whether the central bank will continue to raise interest rates and, if so, when. It is also worth paying attention to the USD/NOK pair, where the rate reached resistance at 9.00.
USD/NOK monthly chart. Conotoxia trading platform.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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