European FX Open - Three big data releases

Three major releases to come this session.

GBP/USD is little changed ahead of key UK employment and AWE earnings in a huge data week locally.

UK unemployment is seen ticking higher to 4.5%, while Bbg wrote pre-data they expect private sector pay gains to slow to 5.2% in June after a material drop the previous month though it would still be a touch above the BOE’s forecast of 5.1%.

Ahead, BOE's Mann told the FT that the UK should not be 'seduced' into thinking the battle against inflation is over after a short-term drop in the headline measure; UK wage growth still concern for inflation.

For the EURO, we get the August ZEW, with survey expectations and the current situation expected to deteriorate this month.

Out of the US, first, we get the NFIB small business optimism, which is seen unchanged at 91.5 in July.

Main US event is the pre-CPI PPI release for July. Final demand is seen slowing to 2.3% y/y vs 2.6% the month previous.

Month-on-month wise, two 0.2% numbers are expected though there is a suggestion that components that feed into the Fed’s preferred inflation measure, the core PCE deflator, are expected to show that measure could be back on the rise, to 0.23% vs 0.18% last.

Overnight, the Australia Q2 wage price index came in unchanged at 4.1% y/y vs a 4.0% consensus. AUD/USD is little changed after, just south of 0.6600, suggesting markets acknowledge wage growth remains elevated and an RBA interest rate cut cycle is still a long way off.

Also, out of Japan, PPI just missed expectations, but rose to 3.0% y/y vs 2.9% last, marking six consecutive months of acceleration as the end of utility subsidies drove up energy costs and it seems another BOJ rate hike before year-end cannot be ruled out.

Nothing scheduled from central banks today, with Fed's Bostic due tonight.

Elsewhere, US stock futures all stand in the green at the time of writing, led by the +0.4% NASDAQ, despite market concerns that an Iran attack on Israel could be imminent. Axios report US Secretary of State Blinken is scheduled to travel to the Middle East tonight and Israel was downgraded by Fitch.

---- Subscribe to read more ----

To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.