•
Bad economic news leads to market euphoria
– Eurozone
GDP disappoints all around: Germany contracts, France stagnates
– US
jobless claims higher than expected, contradicting recent better labor news
– RESULT:
Bund yields hit record lows, US Treasuries rally, stocks up, credit up
•
Market may have been aided by consolatory
Putin comments
– Said he
wants to end Ukraine conflict “as soon as possible”
– But
Russian armor seen heading into Ukraine, US troops headed to Poland, Baltics
•
EM FX generally higher as carry trades come
back
– Return of
the search for yield brings investors back to the EM FX market
– Eastern
European currencies do particularly well
•
Commodity currencies gain despite lower
commodity prices
•
Today:
– UK: 2nd estimate of Q2 GDP. Forecast is same as
initial estimate (+0.8%)
– US: Industrial
production, PPI for July; Empire State manufacturing survey, U of M consumer
confidence for Aug. Forecasts are mixed, leaving no clear impetus for USD
– Canada:
Long-awaited correction to July employment report
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