SMM7 June 9: today's focus on China's June trade account and the monthly CPI rate after the June quarterly adjustment in the United States.
In terms of data,
China's trade account in June reflects an important indicator of a country's export competitiveness and the strength of domestic demand. Australia, as China's largest trading partner, China's trade surplus has expanded, indicating an increase in Australian exports, which in turn has accelerated the growth of the Australian economy. As a result, China's widening trade surplus is good for the Australian dollar.
The final monthly rate of CPI in June in Germany, CPI measures price changes from the perspective of consumers. If the index is higher than expected, the euro should be considered strong / bullish (the usual way to fight inflation is to raise interest rates, which attracts foreign investment), while if the index is lower than expected, the euro should be considered weak / bearish.
The UK's three-month GDP monthly rate in May is an indicator of the health of the UK economy by comparing the changes in the data for the three months ended that month with those for the previous three months. Higher than expected is often considered by the market to be bullish, while lower than expected is often considered by the market to be bad for sterling.
In the UK, manufacturing accounted for about 80 per cent of total industrial output at a monthly rate in May. Better data will boost the pound. The steady rise in the industrial output index indicates that the economy is on the rise.
In the merchandise trade account after the British quarterly adjustment in May, if there is a surplus, it means that there is a net inflow of funds, which is good for the pound; if there is a deficit, it means a net outflow of funds, which is bad for the pound.
The monthly rate of industrial output in the UK in May is generally considered to be the main indicator of manufacturing activity. If the indicator is higher than expected, sterling should be considered strong / bullish, while if it is lower than expected, sterling should be considered weak / bearish.
Germany's July ZEW economic climate index, a more important index of the German economy, is released in the third week of each month. Generally speaking, if the data rises, it will be good for the euro; otherwise, it will weaken the euro. Generally speaking, if the data rises, it will be good for the euro; otherwise, it will weaken the euro.
The euro zone's July ZEW economic sentiment index, which reflects analysts' and institutional investors' expectations for the euro zone's economy over the next six months, is a leading indicator of the economy. Good data, good for the euro.
The monthly rate of industrial output in the euro zone in May, which is a measure of the total output of factories, mines and utilities in the euro zone. It can be used as a leading indicator of manufacturing employment, average income and personal income. If the indicator is higher than expected, the euro should be considered strong / bullish, while if the indicator is lower than expected, the euro should be considered weak / bearish.
In the US NFIB small business confidence index for June, a higher-than-expected figure is seen as good for the dollar, while a lower-than-expected figure is seen as bad for the dollar.
The monthly rate of CPI after the quarterly adjustment in the United States in June is one of the important indicators of US inflation. The Federal Reserve uses this data to adjust monetary policy, which in turn affects the trend of the dollar exchange rate in the short term. If the published value of the data is higher than forecast, the Fed may raise interest rates in order to control inflation, so the dollar may benefit from a rise, otherwise it will be bearish to the dollar.
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