The Week is Starting With a Continuation of Friday’s Mood

By Tomasz Wisniewski|

Published: July 18 2022, 06:43 GMT+0

The Week is Starting With a Continuation of Friday’s Mood

Monday, as usual, is starting with a continuation of the sentiment from the second half of the previous week. Most of the moves are against the general, long-term sentiment, so that actually can be very interesting and maybe we are witnessing the birth of a solid, mid-term correction.

At the end of the last week, traders got a few pleasant surprises. The first one happened on Thursday, when we got the numbers from the Australian job market and they happened to be much better than expectations. On Friday, our screens saw Retail Sales data and the UoM Consumer Sentiment Data from the US and both of them were green, meaning beating the estimates. That helped traders shrug off thoughts about a hard recession, at least for a while.

Monday is usually pretty quiet in terms of data. Actually, the most important publication today is already out – the Consumer Price Index (CPI) from New Zealand which came at 1.7% beating expectations of 1.5%. Despite that, NZD traders seem unimpressed and the NZD is currently losing against almost all major currencies.

One important event happened over the weekend and that’s concerning oil. The POTUS visited MBS and other regional leaders in Saudi Arabia. They had to discuss many topics but oil supply was of course one of the most important ones, at least for the financial markets. I don’t know if traders had any expectation about that but I guess it was not met. Oil started the new week with a rise, so I don’t think that the outcome of that meeting will be an increased production of oil. I don’t even think it was seriously considered as apparently, we are on the limits of the production anyways and there isn’t much that gulf countries could do with that, even if they really wanted to.

EURUSD started the new week with a safe 100 pips margin above the parity, looks like a short-term bullish correction and I guess that staying above the parity is a plan A for this week for Euro buyers.

A currency which looks strong on Monday is the GBP. If you fancy buying some British Pounds, remember that on Tuesday we will have a speech from Bank of England (BoE) Governor Mr. Bailey and on Wednesday, we will receive the CPI data from the UK. Both of those events should be impactful on the Sterling.