Morning Brew July 27 2021
Senior Relationship Manager
Summary: Meta falls 20% and pulls social media with it, ECB and BOE up today
The Dax failed to break above the 15725 yesterday and fell back to 15555.
Besides the US Open, the Bank of England will be in focus, the BOE starts at 13:00 CET, is expected to hike by 25 basis points and outline quantitative tightening. The GBP is currently trading near the upper end of it`s 1.32/1.38 range at 1.3550. A strong surprise would be needed to break out. 1 month Vol is priced at 6.35%.
After the Bank of England the European Central Bank will announce rates and Mme Lagarde will hold her press conference. At 13:45 the rate will be announced, the press conference at 14:30. No hike is expected but an acknowledgement of higher inflation and a hint at rate hikes. Polls of economists see no hike in 2022 but traders price in the possibility. 1 month Vol is trading at 6.27 EURUSD is current y 1.1295.
If you have any strong expectation, EURGBP near two year lows could be your trade.
Our Bond Girl Althea Spinozzi outlines her expectation for the ECB and the bond market reaction here:
Gold and Silver are little moved over night at 1805 and 22.50 Bitcoin loses to 36800. and
Yesterday the ADP employment data came much lower than expected, that could indicate a weak non farm payroll tomorrow even if there is no perfect correlation. rather than adding 200k jobs, 300k were lost.
International PMIs through the day could also move the market if they surprise so we are in for an interesting day.
Thursday: International PMIs, EU PPI , UK rate decision, EU Rate decision, US Employment data and factory orders
Friday: Germany Industrial Orders, EU retail sales, US Nonfarm Payroll
Thursday: Roche Ford Amazon.com Eli Lilly Shell ConocoPhillips , Estee Lauder Cos Inc
Friday:: Bristol-Myers Squibb, Sano FP