<p style=““ class=“text-align-justify“>A light revision higher but it reaffirms that the Italian economy performed rather decently in Q2, much like most of the region. However, the real challenge will be in the second-half of the year with domestic politics also being an issue for the economy.</p>

This article was written by Justin Low at www.forexlive.com.

<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/a-catch-up-to-the-week-in-markets-20220831/“>A catch up to the week in markets</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/eurozone-august-preliminary-cpi-91-vs-90-yy-expected-20220831/“>Eurozone August preliminary CPI 9.1% vs 9.0% y/y expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/france-august-preliminary-hicp-65-vs-67-yy-expected-20220831/“>France August preliminary HICP 6.5% vs 6.7% y/y expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/france-says-it-has-been-ready-for-russian-gas-cutoff-20220831/“>France says it has been ready for Russian gas cutoff</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/germany-july-import-price-index-14-vs-15-mm-expected-20220831/“>Germany July import price index +1.4% vs +1.5% m/m expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/germany-august-unemployment-change-28k-vs-28k-expected-20220831/“>Germany August unemployment change +28k vs +28k expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-mba-mortgage-applications-we-26-august-37-vs-12-prior-20220831/“>US MBA mortgage applications w.e. 26 August -3.7% vs -1.2% prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-state-owned-banks-reportedly-seen-selling-dollars-in-onshore-market-20220831/“>China state-owned banks reportedly seen selling dollars in onshore market</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/covid-19-restrictions-continue-to-stay-the-course-in-china-20220831/“>COVID-19 restrictions continue to stay the course in China</a></li></ul><p>Markets:</p><ul><li>AUD leads, CHF lags on the day</li><li>European equities lower; S&P 500 futures up 0.2%</li><li>US 10-year yields up 2.4 bps to 3.134%</li><li>Gold down 0.5% to $1,714.88</li><li>WTI crude down 2.8% to $89.10</li><li>Bitcoin up 1.7% to $20,310</li></ul><p style=““ class=“text-align-justify“>It was a bit of a choppy day in markets in general but the focus in Europe was on consumer inflation data for August, in which we saw another record reading. The headline annual figure came in above 9% and that just puts more pressure on the ECB to act aggressively next week, though policymakers have already talked that up in the past few days.</p><p style=““ class=“text-align-justify“>Still, it won’t do much comfort for the euro outlook with soaring energy prices continuing to be a problem with flows along the Nord Stream pipeline halted for the coming days and Gazprom also cutting off gas supplies to French utility, Engie, citing a payment dispute.</p><p style=““ class=“text-align-justify“>The dollar was initially softer but regained some poise during the session as the back and forth trading continues, with the main focus staying on Friday’s US jobs report. Equities were higher to start the day but have seen gains evaporate with European indices keeping lower while US futures are mildly higher after having turned red briefly during the session.</p><p style=““ class=“text-align-justify“>EUR/USD fell from 1.0040 to 0.9975 before keeping closer to parity now, down 0.1% on the day. Cable stays softer after yesterday’s drop with the pair down by 0.3% again to 1.1620. Meanwhile, USD/JPY is keeping steady around 138.50-70 levels through the day so far.</p><p style=““ class=“text-align-justify“>Commodity currencies are also little changed against the dollar, with the aussie and kiwi seeing early gains pared as the risk mood falters once again as we look towards US trading. AUD/USD was up to 0.6900 early on but is now up just 0.1% to 0.6850-60 levels.</p><p style=““ class=“text-align-justify“>As noted in the first linked post, there are quite a few developments in markets this week even as the focus stays on the US jobs report on Friday. Month-end trading will be something to watch out for in the session ahead before markets start to hone in on the main event at the end of this week.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Prior -1.2%</li><li>Market index 260.1 vs 270.1 prior</li><li>Purchase index 199.1 vs 202.8 prior</li><li>Refinancing index 562.5 vs 609.8 prior</li><li>30-year mortgage rate 5.80% vs 5.65% prior</li></ul><p style=““ class=“text-align-justify“>Another week, another awful set of mortgage data in the US. Looking at the numbers, activity has crumbled significantly and the downturn could be rather painful for the housing market. Goldman Sachs says that the trend will continue into 2023 with conditions set to be the worst since the global financial crisis:</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>There are quite a number of things going on in markets at the moment, even if the main focus remains on the US jobs report on Friday. Let’s take a closer look to get a better sense of how things are playing out.</p><p style=““ class=“text-align-justify“>White House says employment may „cool off“</p><p style=““ class=“text-align-justify“>Eamonn and Greg had the headlines earlier this week <a target=“_blank“ href=“https://www.forexlive.com/news/a-heads-up-from-the-white-house-about-the-jobs-report-due-friday-jobs-growth-slowing-20220829/“ target=“_blank“>here</a> and <a target=“_blank“ href=“https://www.forexlive.com/news/white-house-press-secretary-white-house-expected-jobs-numbers-to-cool-a-bit-20220830/“ target=“_blank“>here</a> respectively. That could be a reason for why the dollar has been softer or at least not as strong in the aftermath of Jackson Hole. But so far, the Fed message remains clear i.e. inflation is the number one priority at the moment. A 75 bps rate hike is what markets are likely leaning towards but it needs confirmation from Friday’s data and more importantly the US CPI figures on 13 September.</p><p style=““ class=“text-align-justify“>Equities stay under pressure</p><p style=““ class=“text-align-justify“>The early gains yesterday were dashed by the time Wall Street took to bat in trading yesterday. While there was a bit of respite early on today, we have also <a target=“_blank“ href=“https://www.forexlive.com/news/just-like-that-equities-see-gains-dissipate-20220831/“ target=“_blank“>seen that vanquished</a> with European indices now down by close to 1% and S&P 500 futures falling flat after having been up by 30 points at one point during the day.</p><p>The technicals continue to do the talking and a further break in the S&P 500 below its 50.0 Fib retracement level at 3,982 could spell more danger for stocks in the sessions to come.</p><p style=““ class=“text-align-justify“>China looks to slow down or put a stop to the latest yuan drop</p><p style=““ class=“text-align-justify“>After having allowed the yuan to slide in the past few weeks, the PBOC is starting to draw a line on the situation near 6.90 today as noted earlier <a target=“_blank“ href=“https://www.forexlive.com/news/china-starts-to-draw-the-line-on-the-latest-yuan-drop-20220831/“ target=“_blank“>here</a>. Reports on <a target=“_blank“ href=“https://www.forexlive.com/news/china-state-owned-banks-reportedly-seen-selling-dollars-in-onshore-market-20220831/“ target=“_blank“>state-owned banks also bolstering the yuan</a> serves to reinforce the notion and another way to look at things is that this does take away one of the tailwinds for the dollar as of late.</p><p style=““ class=“text-align-justify“>No escape from COVID-19 restrictions yet in China</p><p style=““ class=“text-align-justify“>The constant downgrade to Chinese growth prospects this year has been a major headwind for risk assets and the data is starting to show that as well. As such, the continued headlines involving more COVID-19 restrictions such as <a target=“_blank“ href=“https://www.forexlive.com/news/covid-19-restrictions-continue-to-stay-the-course-in-china-20220831/“ target=“_blank“>this one</a> today will do little to ease worries surrounding China and the global economic outlook in general.</p><p style=““ class=“text-align-justify“>Europe stuck between a rock and a hard place</p><p style=““ class=“text-align-justify“>Surging inflation on one side and soaring energy prices on the other. There is just no escape and it is going to be a troubling winter for Europe, as much as governments are maintaining that they have sufficient gas supply to brave through the coming months. But come next year, we are likely to run it all back again and that is perhaps the big issue. Europe needs a better plan to get through these tough times.</p><p style=““ class=“text-align-justify“>For now, households and consumption will start to feel the pinch but we are also surely going to see businesses suffer and the fear is that it will lead to an increase in bankruptcies and closures i.e. rise in unemployment, if not carefully managed.</p><p style=““ class=“text-align-justify“>The ECB has a tall order to try and balance out the situation and with the window to tighten policy closing in on them, they have little choice but to frontload rate hikes now before it is too late. In this case, it perhaps already is.</p><p style=““ class=“text-align-justify“>Policymakers are pushing for a 75 bps rate hike next week and that is now the baseline expectation, though it won’t do much to convince markets of a better euro outlook at this point.</p><p style=““ class=“text-align-justify“>UK not any better..</p><p style=““ class=“text-align-justify“>The <a target=“_blank“ href=“https://www.forexlive.com/news/british-energy-regulator-ofgem-lifts-gas-electricity-price-cap-by-80-to-3549-20220826/“ target=“_blank“>news</a> on Ofgem raising the gas and electricity price cap in the UK by 80% to £3,549 is perhaps a bigger deal than one would think. The issue here is that this is just the beginning as we head into winter and the price cap is likely to jump further next year.</p><p style=““ class=“text-align-justify“>With inflation already struggling to be kept under control, the news is but a major blow to UK households who are already struggling to keep it together as food prices and energy prices are weighing on their livelihoods. According to analysts, the latest price cap increase could see some UK households pay more on electricity than they do on mortgages. That fact alone is rather mind boggling and tells you how dire the situation on the ground really is.</p><p style=““ class=“text-align-justify“>Dollar the best of the bunch but only just</p><p style=““ class=“text-align-justify“>With the Fed maintaining its resolve at Jackson Hole, the dollar continues to sit in a good spot when viewed fundamentally across the board. Sure, recession risks are building and inflation could be starting to plateau but the Fed is adamant that its job is not done yet. That message itself i.e. more rate hikes to follow is enough to keep the greenback ahead of the rest of the major currencies, but only just.</p><p style=““ class=“text-align-justify“>The phrase „the cleanest shirt among the dirty laundry“ comes to mind and there’s not much reason to stick with other major currencies over the dollar. For one, equities are under pressure and the Fed vs BOJ policy divergence is arguably allowing the dollar to maintain its favourable preference over the yen as a safe haven as such.</p><p style=““ class=“text-align-justify“>Then, we have the whole dire economic outlook situation in Europe and the UK with the ECB and BOE among the first two central banks likely to fold in the tightening policy race. That makes both currencies also less desirable against the dollar with the Fed still maintaining its composure.</p><p style=““ class=“text-align-justify“>The swissie is perhaps a close contender but only on merit and not actual market flows, at least that would be my view. The SNB surprised with tightening policy and that has been enough to bolster the franc but with emerging market currencies also being routed amid faltering risk sentiment and a less optimistic global outlook, the dollar is still a major beneficiary from outflows there as a result.</p><p style=““ class=“text-align-justify“>Even if the dollar may be edging the rest of the major currencies by that little bit, that gap is more than enough in a market where thin margins count for a lot – especially when central banks are the ones dictating the pace of the game.</p><p style=““ class=“text-align-justify“>There will come a time where the dollar reverses course and we run things back the other way but unless US data significantly compels the Fed to back down, that time isn’t here yet.</p>

This article was written by Justin Low at www.forexlive.com.

<p class=“MsoNormal“>We’re already more
than halfway through 2022 and we’ve witnessed major market highs and lows that
have pushed traders to their limits. While it may be challenging to stay ahead
of economic events and maintain your confidence, it’s essential to remember that
this is what CFD trading is all about. As you know, online trading comes with
the risk of losing, and this is why to be a trader means to possess the
discipline and skills needed to make the next trading move.</p><p class=“MsoNormal text-align-justify“>An all-around
technical and fundamental analysis awareness can create an effective trading
strategy that will enable you to understand market movements and more easily
plan your trading day. Let’s take a look at some of the most prominent events
that shook the markets in Q2 and their potential effect on the rest of the
financial year.</p><p class=“MsoNormal text-align-justify“>Major Economic Events of Q2</p><p class=“MsoNormal text-align-justify“>Inflation: this economic
phenomenon has affected all aspects of the economy and continues to shape the
financial markets. Inflation occurs when prices go up as a result of increases
in production costs caused by a surge in demand for services and products.
Evidently, this has huge consequences on society that can prove to be
destructive. </p><p class=“MsoNormal text-align-justify“>High inflation can
make the stock market more volatile as we have seen during these months, with
the stock market reaching record-breaking highs and lows. Eventually, an
extended period of high inflation can lead to an economic recession which will
have long-lasting impacts on society, including higher unemployment, and lower
incomes, and traders and investors typically turn away from volatile markets as
they seek safe havens.</p><p class=“MsoNormal“>The S&P 500 plummeted by -20.6%: this Q2 has
been the worst half performance in the last 50 years for S&P 500. This has
been the result of many factors including high inflation expectations, a
tightening monetary policy by the Federal Reserve, and the devastating effects
of the Russia-Ukraine war. This stock sell-off also enhanced recession fears,
as traders and investors prepare for what’s to come when the economy takes a
turn.</p><p class=“MsoNormal text-align-justify“>Crypto Crash: 2022 has been a bumpy
road for major cryptocurrencies, to say the least. If you think about the fact
that Bitcoin had managed to reach over 65,000 USD in 2021 and then fell just
above 20,000 USD in June 2022, you may start to wonder if the crypto bubble is
about to burst. In Q3 BTC is still struggling to stay above the 20,000 USD
benchmark as traders are hesitating to make the move. </p><p class=“MsoNormal text-align-justify“>What could be next and what can you do?</p><p class=“MsoNormal text-align-justify“>The unpredictability
of the global economy and the public’s reaction to it does not allow traders to
rely on forecasts and predictions. In turbulent times like these, traders need
to be aware of what’s going on and be able to understand how <a target=“_blank“ href=“https://xpromarkets.com/economic-calendar/“ target=“_blank“>economic events </a>can impact their
trading positions. This means that it is always a good idea to take a step back
to <a target=“_blank“ href=“https://xpromarkets.com/chart-analysis/“ target=“_blank“>analyze market movements</a> from every point of
view.</p><p class=“MsoNormal text-align-justify“>Our team at <a target=“_blank“ href=“https://xpromarkets.com/“ target=“_blank“>XPro Markets</a> has made sure
that you can access the trading tools and resources you need to stay in the
loop about everything that has to do with the global markets. </p>

This article was written by ForexLive at www.forexlive.com.

<p class=“MsoNormal“>Market
picture</p><p class=“MsoNormal“>Bitcoin has
stopped falling but has still not managed to gain strength to rise, remaining
near $20K. Ethereum remains more interesting for buyers, increasing 1.6%
overnight to above $1600. Top altcoins showed mixed dynamics: from a decline of
1.3% (Dogecoin) to a rise of 2.2% (Cardano).</p><p class=“MsoNormal“>Total crypto
market capitalisation, according to CoinMarketCap, rose 0.2% overnight to
$997bn. The Cryptocurrency Fear & Greed Index fell 4 points to 23 by
Wednesday and moved into „extreme fear“ status.</p><p class=“MsoNormal“>The upcoming
move to proof-of-stake creates a speculative component to Ethereum’s dynamics.
While in the short term, after September 6, there could be a
„sell-through,“ causing pressure on the price, in the longer term, such
a transition will strengthen interest in using Ethereum for transactions,
making them cheaper. This promises more interest in the coin, allowing it to
remain „better than the market“.</p><p class=“MsoNormal“>On the data
analysis side, ETHUSD is trying to get back above the 50-day average, which is
an informal indicator of the medium-term trend. A consolidation above $1620,
like in July, could be a prolonged rally with possible targets at $2000-2200 in
the nearest future. The opposite is also true. A reversal down from this level
will weaken bulls, as it did in February and April, triggering a new decline
towards $1000.</p><p class=“MsoNormal“>News
background</p><p class=“MsoNormal“>Some 5,000
BTCs, which have been in „hibernation“ for the past 7-9 years, are on
the move, said Look Into Bitcoin founder Philip Swift, citing data from the
Whale Shadows indicator. Historically, such spikes in activity have preceded
significant price declines.</p><p class=“MsoNormal“>A link has
been established between the 10,000 BTC, which on August 29 went in motion for
the first time since 2013, and the bankrupt cryptocurrency exchange Mt.Gox, a
Telegram channel reported.</p><p class=“MsoNormal“>Meanwhile,
the US Federal Bureau of Investigation has advised investors to be wary of
investing in decentralised finance (DeFi) projects as they are too vulnerable
to hacking.</p><p class=“MsoNormal“>Iranian
authorities have approved a comprehensive law regulating cryptocurrency
transactions. In particular, imports from abroad with payment in digital assets
are allowed.</p><p class=“MsoNormal“>This article was written by <a target=“_blank“ href=“https://www.fxpro.com/“ target=“_blank“>FxPro</a>’s Senior Market Analyst Alex
Kuptsikevich.</p>

This article was written by FxPro FXPro at www.forexlive.com.

<ul><li>Prior 7.5%</li><li>CPI 0.3% vs 0.3% m/m expected</li><li>Prior 0.9%</li><li>HICP 8.8% vs 8.8% y/y expected</li><li>Prior 8.5%</li><li>HICP 0.4% vs 0.4% m/m expected</li><li>Prior 0.8%</li></ul>

This article was written by Justin Low at www.forexlive.com.

<ul><li>Swift normalisation of interest rates is an essential first phase</li><li>Must forcefully tackle persistently high inflation</li><li>Inflation will remain high for some time; markets expect peak in Q1 next year</li><li>Sees several upside risks to inflation</li></ul><p style=““ class=“text-align-justify“>This ties with the more aggressive comments from ECB policymakers since Jackson Hole over the weekend. As things stand, a 75 bps rate hike next week appears to be the most likely scenario as they are also doing their best to tee that up.</p>

This article was written by Justin Low at www.forexlive.com.

<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/equities-recover-some-allure-after-post-jackson-hole-drop-20220830/“>Equities recover some allure after post-Jackson Hole drop</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/a-couple-of-reasons-for-the-softer-dollar-today-20220830/“>A couple of reasons for the softer dollar today</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/saxony-august-cpi-73-vs-72-yy-prior-20220830/“>Saxony August CPI 7.3% vs 7.2% y/y prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/bavaria-august-cpi-84-vs-80-yy-prior-20220830/“>Bavaria August CPI 8.4% vs 8.0% y/y prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/north-rhine-westphalia-august-cpi-81-vs-78-yy-prior-20220830/“>North Rhine Westphalia August CPI 8.1% vs 7.8% y/y prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/spain-august-preliminary-cpi-104-vs-109-yy-expected-20220830/“>Spain August preliminary CPI 10.4% vs 10.9% y/y expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-to-hold-20th-communist-party-congress-starting-on-16-october-20220830/“>China to hold 20th Communist Party congress starting on 16 October</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-july-mortgage-approvals-6377k-vs-6173k-expected-20220830/“>UK July mortgage approvals 63.77k vs 61.73k expected</a></li></ul><p style=““ class=“text-align-justify“>Markets:</p><ul><li>AUD leads, CHF lags on the day</li><li>European equities higher; S&P 500 futures up 0.8%</li><li>US 10-year yields down 4.7 bps to 3.063%</li><li>Gold down 0.3% to $1,732.53</li><li>WTI crude down 3.0% to $94.08</li><li>Bitcoin up 1.1% to $20,408</li></ul><p style=““ class=“text-align-justify“>With month-end trading in focus, markets are reversing some of the post-Jackson Hole moves as the dollar falls, equities climb and bond yields retreat in European trading today.</p><p style=““ class=“text-align-justify“>It could also be because the White House alluded to labour market conditions going to „cool off“ ahead of the US jobs report on Friday and we have seen how those comments affect markets previously when it comes to inflation data.</p><p style=““ class=“text-align-justify“>Either way, the theme is consistent with a retreat of the moves from Friday and yesterday. The dollar fell with EUR/USD climbing up from parity to 1.0055 before easing a little to 1.0020. Meanwhile, GBP/USD pushed to a high of 1.1760 before falling flat on the day to 1.1710 at the moment.</p><p style=““ class=“text-align-justify“>USD/JPY is looking heavy as bond yields fell, with the pair easing from 138.50 to 138.05 before keeping around 138.20 currently.</p><p style=““ class=“text-align-justify“>As equities pushed higher, commodity currencies are benefiting with AUD/USD up 0.4% to 0.6930 with the high earlier coming in at 0.6955. USD/CAD was down to a low of 1.2973 before a drop in oil prices pressured the loonie and the pair is back up to flat levels at 1.3010 on the day.</p><p style=““ class=“text-align-justify“>It looks like markets are going to get stuck in once again over the next few days as the dollar momentum has been quelled. That means we are likely to see some pushback on the gains from Friday but I would expect the greenback to still hold its ground before we get to the NFP release at the end of the week.</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>The congress typically lasts for about a week, in which members of the party will gather to choose the leadership for the next five years. For some context, China passed a constitutional amendment that allowed the president to serve an unlimited number of five-year terms back in 2018. That was pretty much Xi cementing his power on the throne as he could very well serve as president for life in China.</p>

This article was written by Justin Low at www.forexlive.com.