Key Points and Outlook for August 15 (Wednesday)
8/15 (Wednesday)
09:30 AUDWestpac Consumer Confidence Index
16:00 TRYTurkey Unemployment Rate & Budget Balance
17:30 GBPCPI (Consumer Price Index)
21:30 USDRetail Sales
23:30 USD Crude Oil Inventories
8/16 (Thursday)
08:50 JPYTrade Balance
10:30 AUDEmployment Change & Unemployment Rate
※ are indicators to be traded
◎ Today’s Focus
Today’s economic indicators are all important metrics.
Particularly noteworthy are the UK CPI and Australian employment data.
UK CPI fell significantly after Brexit, causing the pound to weaken.
Pound weakness led to higher prices, and the inflation rate rose temporarily to 3.0%.
Rising 3% year over year→Wage growth cannot keep up→Consumer spending declines (savings)→Economic slowdown
That was last year’s situation.
The BOE is responding by raising rates to curb inflation.
Whether rate hikes continue depends on therelationship between employment data (average earnings) and CPI.
Yesterday’sAverage Earnings rose 2.4% (Expected: 2.5%).
Today’sCPI (Consumer Price Index) forecast is 2.5%.
A deviation from expectations is likely to cause large moves temporarily!
After that, the comparison between yesterday’sAverage Earningsand today’sCPI (Consumer Price Index)will be crucial.
Here is a comparison chart of past Average Earnings and CPI.
Another key indicator is Australia’s employment data.
Employment is not the Reserve Bank’s remit, but it is likely to move significantly.
In particular, watch the unemployment rate closely.
The AUD has fallen toward last June’s low against the Swiss franc.
Worsening unemployment could break below the AUD/CHF multi-year lows.
AUD/CHF is viewed as a multi-year position, so I am personally watching it.
AUD/USD continues to make new lows, nearing the lows from two years ago.
AUD/USD Weekly Chart
Other focus is Japan’s Trade Balance.
In the recent U.S. jobs report, markets reacted to the simultaneous release of U.S. Trade Balance results.
Experts’ comments on the trade balance caused the reaction.
Currently, relations between the U.S. and China on trade and tariffs are deteriorating.
The U.S.-Japan trade talks, held recently, were postponed to September.
Trump and the United States are expected to respond to the results.
And then, Turkey needs no introduction.
The whole world is watching Turkey.
If any Turkey-related information (headlines) comes out, reactions will occur across many places.
I will summarize Turkey separately.
However, in this risk-off environment, capital tends to flow into the bond market (government bonds), making long-term yields notable.
Pay attention to long-term yields,Check the 10-year yields of the target countries.
US 10-year yield chart
Japan 10-year yield chart
Germany 10-year yield chart
Spain 10-year yield chart
Turkey 10-year yield chart
The relationship of long-term yields is often as follows.
