Thursday is a busy day when it comes to economic data. Japanese retail trade and industrial production data will be released early in the Asian session. Later, New Zealand ANZ Business Confidence, Chinese PMI data for August and Australian Private Sector Credit will be released. The most prominent data for the day will be the CPI for the Eurozone and the core CPI for the United States.
Here’s what you need to know on Thursday, August 31:
He Dollar Index fell for the third day in a row, reaching the lowest close in two weeks, just above 103.00. The dollar remains under lower pressure on disappointing US data and declining Treasury yields. The 10-year yield bottomed at 4.08% (low since Aug. 11) before rebounding to 4.11%.
After Tuesday’s JOLTS and consumer confidence numbers fell below consensus, the ADP employment change on Wednesday also came in below expectations, and second quarter GDP was revised down. The change in employment reported by ADP was 177,000, below the market consensus of 195,000. These numbers do not bode well for Friday’s Nonfarm Payrolls report. However, ahead of the key jobs report on Thursday, the underlying Personal Consumption Expenditure Price Index will be released. This index is the Federal Reserve’s preferred measure of inflation. In addition, weekly jobless claims and the Chicago PMI will be released.
Nela Richardson, Chief Economist at ADP:
This month’s figures are consistent with the pace of job creation prior to the pandemic. After two years of exceptional recovery-related gains, we are moving towards more sustainable wage and employment growth as the economic effects of the pandemic recede.
During the Asian session, a key report to watch is the Chinese NBS PMI for August. The manufacturing index is expected to rise moderately to 49.4, while the services index is expected to decline to 51.1 from 51.5.
Data released on Wednesday indicates that the German inflation rate fell from 6.2% to 6.1% in August, reflecting a continuation of the downward trend. However, in Spain inflation picked up from 2.3% to 2.6%, as expected. The Eurozone Consumer Price Index (CPI) will be published on Thursday, as well as German retail sales and unemployment.
Commerzbank analysts weigh in on German inflation:
In the coming months, the inflation rate is likely to continue to fall significantly, particularly as external cost pressures have eased markedly. However, higher wage growth is likely to continue to push up services prices, so at least the core inflation rate is likely to remain well above the ECB’s 2% target.
The EUR/USD pair rose to 1.0947, hitting the highest level in two weeks, supported by a weaker USD and rising expectations for a tougher stance from the European Central Bank at the September meeting. The pair experienced a pullback but is still holding above 1.0900 with a bullish bias.
The British pound outperformed on Wednesday. The EUR/GBP pair pulled back from its weekly highs and fell to 0.8585. GBP/USD rose 100 points to 1.2747, the highest level since August 23, but then pared its gains. It currently hovers around the 20-day SMA near 1.2720.
USD/JPY hit a low of 145.55 before bouncing to 146.25, ending the day in positive territory. The move higher came as US yields moved away from their weekly lows. Japan’s retail sales and industrial production are scheduled for release on Thursday.
The Australian dollar was not affected by lower-than-expected inflation data or a sharp drop in building permits. The AUD/USD pair ended flat around 0.6470 after failing to hold above 0.6500. The short-term trend remains bullish, but the Australian dollar has lost momentum. In Australia, data on credit to the private sector and capital spending will be published.
The NZD/USD pair faced rejection above the 20-day SMA and the 0.6000 level, indicating difficulties in extending its rally. The ANZ business outlook survey will be published on Thursday.
USD/CAD continued its decline for the third day in a row, extending the decline from 1.3645. The key support level lies between 1.3490 and 1.3500.
Gold rose for the third day in a row, finding resistance at $1,950. Falling yields and a weak dollar supported the yellow metal. the silver it reversed after reaching $25.00 and closed slightly lower at $24.60.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
