Tuesday brought mixed results of indices from the US stock market. The Nasdaq Composite technology index gained 0.1 percent. The other benchmarks, the SP500 and the Dow Jones, were down 0.3% and 0.3%, respectively. and 0.5 percent.
Tuesday brought mixed results of indices from the US stock market. The Nasdaq Composite technology index gained 0.1 percent. The other benchmarks, the SP500 and the Dow Jones, were down 0.3% and 0.3%, respectively. and 0.5 percent. In Europe, the session was a bit more successful. The popular DAX rose by 0.7 percent. and this morning it is again above the 0.45 percent mark. The dollar gained dynamically yesterday and the main currency pair dropped from 1.0920 to 1.0840 before rebounding to 1.0870 this morning. Up to the ceiling of 5.05 percent. US 2-year bond yields soared.
Today in the morning attention will be focused on PMI data from Europe and the US, although of course market participants are waiting for Jerome Powell’s speech at the Jackson Hole symposium on Friday. The Industrial Purchasing Managers’ Index for European countries has been well below expansion levels for months and could fall further. The Services Index sheds some light on this gloomy picture as it was still above 50 in July but is also likely to weaken further.
The data is interesting because it concerns August and is the first, estimated reading. For France, the situation in industry improved slightly, while services deteriorated. In Germany, the first indicator showed a rebound to 39.1 points. which is still not very optimistic. The one for services fell to 47.3 points. – for the first time below the borderline level in many months.
There is a strong reaction to the euro. The single currency loses as a result of data releases. This time there is an obvious weakness of services. The exchange rate of the main currency pair fell to 1.0810 and if the figures for the entire euro zone confirm this picture, then breaking the round barrier of 1.08 seems inevitable.
Weak data put pressure on the single currency as speculation mounts that the ECB will make fewer hikes until the end of the cycle due to the deteriorating economic situation. The market may also assume that a more severe cooling down than expected will force the ECB to start reducing the cost of money earlier. The new inflation data for August, which will be released next Thursday, will probably contribute a lot.