17/08/2021 -DAILY MARKET REPORT



  • The dollar strengthened across the board yesterday as buyers sought a safe haven as risk sentiment soured. Although volumes are low, as is typical for mid-August, investors are starting to become more nervous about the spread of the Delta variant of Covid and dropping consumer confidence in the US. The turmoil in Afghanistan is also beginning to raise questions about the Middle East's long-term geopolitical landscape. Sterling has so far been on the sidelines, but it has been benefiting recently more than the euro when risk sentiment has turned negative, this should continue.

  • The UK labour market report released earlier is unlikely to move sterling too much this morning. It showed that average weekly earnings, including bonuses, in the three months to May, grew from the previous 7.4% to 8.8%, a little higher expected. The further good news was that the ILO unemployment rate for the three months to June dropped to 4.7%. This number is still distorted by the ongoing furlough scheme.

  • After this morning's Unemployment and Earnings report from the ONS, we will watch the European Employment data with added interest when it is released later today. At the same time as this report, Eurostat will release estimates of second-quarter Gross Domestic Product for the Eurozone, all of which should lead to an exciting morning for the euro. In the US, July's Retail sales are estimated to drop by 0.2% when released later. The market's reaction to this figure may be cautious as some analysts suggest that the figure may have some anomalies due to supply chain disruption in the auto industry.

On This Day...

On this day in 1998, US President Bill Clinton admitted in taped testimony that he had an "improper physical relationship" with the intern Monica Lewinsky. On the same day, he admits before the nation he "misled people" about the relationship.


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