Latest data from the Mortgage Bankers Association for the week ending 28 August 2020
–  -6.5%
– Market index 755.1 vs 770.6 prior
– Refinancing index 3,316.2 vs 3,423.0 prior
A slight drop in mortgage applications in the past week with purchases and refinancing activity both seeing weakening a touch, despite the long-term rate falling another 3 bps to 3.08%

The greenback leads gains in the major currencies space
Stocks are up on the day but the dollar is also up as the pullback momentum from yesterday extends into the new trading day today. The dollar held its ground in early European trading but is gradually pushing higher now as we look towards US trading.

Richmond Fed president, Thomas Barkin, remarks in a WSJ interview
– Fed will need to continue to provide significant, sustained support
– Economy faces a slowing labour market recovery
The remarks on the slower recovery aren’t anything new but certainly sets up a renewed focus on labour market data, particularly after Powell’s speech from last week.

The spat between the two countries continues to brew
Again, this just adds to the ongoing economic impact that is slowly being heaped on by China towards Australia and isn’t a positive development for the aussie.

The dollar fails to catch a break so far in European morning trade
But the pace of the decline in the greenback isn’t really extending all too much outside of cable, which is continuing to push towards the 1.3500 handle.

Forex news from the European trading session – 1 September 2020
Headlines:
Markets:
– GBP leads, CHF lags on the day
– European equities higher; E-minis up ~0.3%

German economy minister, Peter Altmaier, says that the economy is in an ‚unexpectedly fast‘ V-shaped recovery
– 2020 GDP forecast revised to -5.8%; previously -6.3%
This confirms the reports from earlier today but Altmaier is offering relatively upbeat remarks surrounding the economic situation in general.

Latest data released by Eurostat – 1 September 2020
The ECB may still afford to wait for now before reacting but a more severe drop in price pressures and inflation expectations potentially deanchoring may prompt some form of action. If anything else, don’t expect them to be too happy with a rising euro.

Latest data released by Destatis – 31 August 2020

Latest data released by Destatis – 31 August 2020
This just reaffirms expectations that the German national reading should see headline annual inflation come in similar to July at around -0.1% y/y or 0.0% y/y. As mentioned earlier, all the state readings generally just give out the impression that price pressures remain more subdued in August