A survey came out yesterday which showed that the deal between Greece and its creditors and talks over a third bail-out have boosted investors’ confidence in Europe’s largest leading economy. German business confidence improved this month after two consecutive drops in the preceding months. The Ifo business climate index, which is based on a survey over 7k private companies, spiked to 108.0 from June’s 107.4. The reads are higher than Reuters benchmark of 107.2.
If we look at the GBP/USD trend, we can see that it’s following a more outstretched, risky path set from yesterday morning, rallying up in the 1.5480 zone. Despite the good news received from Governor Carney and BoE Board Members, the hawkish tendency is yet to appear, the spot rate closing lower after a bounce-back from around last week’s 1.5760. Investors avidly expect today’s news which bring the flash GBP rates for this year’s second quarter. The majority presumes a 0.7% inter-quarter expansion and 2.6% for the last 12 months.
On USA’s side, things continue to look better and better. The Commerce Department announced today a 3.4% increase of orders for durable goods in June, a noticeable improvement from May’s 2.2% revised downfall. Forecasts expected only a 3.2% rise for June. The difference between orders and transportation widened with 0.8%, the peak since August 2014, also exceeding the 0.5% threshold. Business investments, best reflected by orders of capital goods, also increased. This is explained by an orders increase of 0.9% with a 2-month previous deterioration. The core orders on the other hand are at 3.4%, below the rates of 2014’s June. Also, shipments of core capital goods (an important factor in the GDP) missed the estimated rise to 0.6%, falling in return with 0.1% in June
Yesterday, China’s statistics bureau release a report stating the fact that the country’s industrial profits fell with 0.3% in comparison to the same period last year, after a rise of 2.6% in April and a rise of 0.6% in May. On Friday, preliminary analyses of China’s Caixin PMI broke all forecasts with a value 48.2, much under the expected 49.7 and also marking a 15-month low. The Shanghai Composite (SSEC) is currently trading with a loss of 7% with a weekly low of 3777, falling approximately 300 points.
Gold price closed on Monday at $1092/Oz after it was unable to sustain above USD 1100/Oz level. This top was made due to the fall of Chinese equities. In the last time, the metals trend has not responded well to changes in the economy or other high-risk events (Grexit)
