Gold prices continue to move higher this week, as the soft US GDP report has weighed on market sentiment. Preliminary GDP for the second quarter disappointed, as markets had expected a strong gain of 2.6%, while the economy responded with a much smaller gain of 1.2%. It seems less likely a hike in September rates given recent economic data. On Sunday, the FOMC William Dudley, a close ally of Janet Yellen, said the fallout Brexit posed a risk to the US economy and urged the Fed to proceed with caution before raising interest rates. The USA. will release the growth of wages and nonfarm payrolls later in the week, and these key employment figures will be closely monitored by the Fed as it ponders a possible rate hike. Markets have turned September and December as the most likely date for rate hike, but if the Fed is not satisfied with the performance of the economy, which could delay any move until 2017.
The manufacturing sector has been one of the weaknesses of the US economy, and the week began with warm production numbers. Manufacturing ISM manufacturing PMI and prices pointed to a slight expansion, but both indicators fell short of its estimates. An ongoing global economic slump has taken a toll on the manufacturing sectors of developed economies, and the US is no exception. At the same time, prices of Construction disappointed with a drop of 0.6%, its fourth decline in the past five months.
/ USD WTI Basics
Tuesday (August 2)
8:30 Price Index US PCE Core. 0.1% estimate. Current 0.1%
8:30 Personal Spending United States. 0.3% estimate. Current 0.4%
8:30 Personal Income United States. 0.3% estimate. Current 0.2%
All day - US vehicle sales in total. 17.1m estimate
Upcoming key events
On Wednesday (August 3)
8:15 ADP Non-Farm Employment Change. 171K estimate
10:00 ISM non-manufacturing PMI. 56.0 estimate
* Key Announcements are highlighted in bold
* All times are EDT release
XAU / USD on Tuesday, August 2, 2016
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