Markets mixed as traders focus on Delta variant and upcoming inflation data

Markets mixed as traders focus on Delta variant and upcoming inflation data

Global equities are mixed and the dollar is slightly lower today, as traders focus attention on the potential economic impact from the spreading Delta variant and on this week’s upcoming US inflation data. Last Friday’s strong US payroll data led to increased expectations of higher US rates, which triggered a sell-off in oil and gold prices, but did not prevent US Treasury 10-Year yields from falling to 1.27%. Traders are beginning to shift attention to the Kansas Fed’s Economic Policy Symposium in Jackson Hole on August 26-28 when Fed Chair Powell will speak.

This week's economic data:

Monday: US Jobs Openings and Labor Turnover Survey (JOLTS) (June); Eurozone CPI, Industrial Production and Unemployment

Tuesday: US Unit Labor Costs (Q2); Nonfarm Productivity (Q2)

Wednesday: US CPI (July); Real Ave Weekly Earnings

Thursday: US PPI (July); Initial Jobless Claims; UK GDP (Q2), Industrial Production (June)

Friday: US Import Prices (July)

  • FX Rates
    August 9, 2021

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    A strong US job’s report reading on Friday led to increased concern that the Fed will begin to taper its asset purchases sooner than later this year. Inflation data will be released later in the week – CPI on Wednesday, PPI on Thursday, and Import Prices on Friday. Current expectations of high figures will have traders trying to determine if such data will change the Fed’s current inflation “transitory” story.

    GBP

    The UK pound is slightly higher on the back of last week’s hawkish turn by the Bank of England. Traders have increased the odds of a rate hike in February to 60%. Traders look forward to a slew of economic data on Thursday – Construction Output, GDP, Government spending, and Industrial Production, Exports/Imports.

    EUR

    The euro held steady today, as traders digest a slew of economic data releases for the eurozone. Aside from lower Industrial Production, most economic data – current account/trade balance, unemployment – improved over the previous period.

    CAD

    The Canadian dollar outperformed most G-10 currencies despite lower oil prices. The only data released today was the Bloomberg Nanos Confidence Survey, which was slightly higher than the prior period.

    ASIA/PACIFIC

    The Chinese yuan moved little since Friday. There were no economic releases today, but Retail Sales and Industrial Production next week will be closely watched.

    The Japanese yen outperformed, but the USD/JPY remains above the key 110 level.

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Scott Petruska
WRITTEN BY
Scott Petruska

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