Weekley Update 08/01/22

Australia’s inflation rate increased to 6.1% in July

• The release came slightly short of the anticipated rate, positively impacting the currency.
• Australia also released the Consumer Price Index that resulted better than expected, totaling 4.9%

The US Fed hiked the Interest Rate, and the GDP growth rate came out negative for the second quarter in a row.

• The Fed hiked the interest rate 75 bps leaving it at 2.5%
• Chairman Powell mentioned that a growth slowdown is necessary to restore price stability in the US.
• The USD lost significant ground across all major currency pairs.
• The US economy struggled during the second quarter when the economy continued contracting.

EU released the Inflation Rate.

• The consensus was 8.6%, but the actual results came out higher than anticipated with 8.9% which 
• EU also announced GDP Growth Rate with a better result than consensus with a 0.7%

Russia cuts down Nordstream 1 supply to 20%

• After the scheduled maintenance, Gazprom reduced the Natural Gas exports to the EU, which could cause an energetic crisis in Europe and a potential recession to Germany.
• Politicians in the EU believe that the supply can be cut furthermore during wintertime as retaliation for continued sanctions on Putin's government.

High Impact News Releases

EU will announce the unemployment rate on Monday, and the consensus is that it will stay at 6.6%. S&P Manufacturing PMI data will also be released with an expected decline to 49.6, which is in the economic contraction area. 

The Reserve Bank of Australia will release its Interest Rate decision on Monday; a hike of 50bps is expected by experts, leaving the rate at 1.85%

The UK will announce BoE Interest Rate Decision; a hike of 25 bps is expected Thursday.

The US will release Non-Farm Payrolls on Friday, which is expected to decline from 372K to 255K, likely weakening the USD.

Canada will release the Unemployment Rate on Friday, which is anticipated to stay at 4.9%

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