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Buoyant Business Surveys Possitively Impact Euro And Bond Yields

financial markets

August 23rd was marked by the growth of the bond yields of the European single currency and euro zone government. The increase took place right after a survey which showed the best months of growth in the bloc’s manufacturing businesses in 6.5 years.

U.S. stocks opened lower: Wall Street futures down 0.3 percent.

Forecast-beating surveys in France and Germany helped to increase the euro rate against the dollar. Thus the dollar wobbled against the yen while on comments from the U.S. President Donald Trump.

The STOXX 600 went down,while media stock WPP shed more than 10%.

“At a broad level what PMIs are telling you is that the momentum of the euro zone recovery continues and the strength of the euro is not containing it,” Investec economist Philip Shaw said.
As mentioned earlier, the dollar wobbled against the yen. This happened after Trump in his speech expressed his willingness to bring the government to a shutdown just to secure funding for a wall on the USA-Mexico border.

World financial markets have been under the pressure of recent circumstances, like: heightened tensions on the Korean peninsula, turmoil in the White House, and growing doubts about Trump’s ability to fulfill his economic agenda.

Global central bankers are to gather this week in Jackson Hole, Wyoming which prompts to rebalance investors` currency positions.

DOLLAR LOW

The dollar lost its positions a little against the yen at 109.38 yen. The decrease was due to the Trump`s speech in Arizona and especially “If we have to close down our government, we’re building that wall”.

The dollar index against the 6 major currencies was slightly down at 93.412.

Mexico`s peso was also 0.6% down against the dollar when Trump suggested that NAFTA trade treaty could be overviewed to jumpstart ongoing renegotiations.

“The ECB is clearly very concerned about the recent appreciation in the euro … and recent ‘misinterpretations’ by traders to Draghi’s comments will likely mean he steers clear (of discussing policy) once again,” said Craig Erlam, OANDA`s senior market analyst.

European Central Bank President Mario Draghi and Fed Chair Janet Yellen speeches will headline the annual Jackson Hole event, nevertheless no announcement of any significant policy is expected there. On Wednesday Draghi presented a speech at Lindau, Germany though the ECB’s current monetary policy was not discussed then.

In commodities, Brent crude traded 0.3 percent lower at $51.68 a barrel. Nickel prices went highly up while zinc reached its highest since August 2007 due to the expectations of heavy demand from China.

Spot gold reached a nine-month high with over $1,300.00 an ounce.
Benchmark zinc was at $3,142.50 a tonne after rising to $3,231.75, which is its highest rate since August 2007. Zinc rates have risen on expectations of a large global deficit and a sharp fall in stocks.

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