Focus on EUR, GBP, USD Trading Events – Spot Gold, Crude Oil in Lull

August 23, 2022 10:35

Key economic benchmarks underlying the EUR, GBP and USD are released today as spot gold and crude oil prices appear to be in a lull after a volatile couple of quarters.

EUR traders are watching the results of the preliminary S&P August Global Manufacturing Purchasing Manager’s Index (PMI) for Germany today. Growth in the manufacturing sector is expected to have dropped from 49.3 in July to 48.3 in August. Any unexpected surprises to the upside or downside may move the EUR crosses.  

The report follows on the heels of a downbeat statement to the media from Bundesbank chief Joachim Nagel, who pointed to a possible Winter energy crisis as the trigger for a recession in Germany. The EUR dipped against the USD, bobbing around parity as traders priced in more aggressive interest rate hikes in the Eurozone. 

The preliminary S&P Global Composite PMI for the Eurozone is also released today and is expected to contract further from 49.9 in July to 49 in August. Unlike the US and UK, Europe’s GDP remains in growth territory, but with high inflation and impending interest rate hikes this could change in the short term. Today’s PMI figures will be closely watched for further signs of weakness in Europe’s economy.  

GBP trading markets are watching for the preliminary S&P Global Services PMI report due out today. August’s results are expected to have dropped to 52 from 52.6 in July. As the UK is on the brink of a technical recession, the actual figures may move the GBP crosses if anything unexpected appears in the report.  

Finally for red-flagged trading events, on Wednesday, August 24, USD traders will be watching the results of US Durable Goods Orders which are expected to have fallen from 2 percent in June to 0.5 percent in July. With the US in a technical recession amid inflationary headwinds, the benchmark will reveal more about the stability of the manufacturing sector and spending on big-ticket goods.  

With the fourth quarter just around the corner, central bank meetings are on the agenda after Federal Reserve Bank chief James Bullard said he supports another 0.75 percent interest rate hike during the September meeting. As inflation heads downwards, it appears that aggressive monetary tightening is working but may continue to pressure growth in the short-to-medium term.

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

Sarah Fenwick
Sarah Fenwick Financial Writer, Admirals London

Sarah Fenwick's background is in journalism and mass communications. She has worked as a correspondent covering Swiss Stock Exchange news and written about finance and economics for 15 years.