Japan’s GDP figures showed growth over the April-June period. Figures were forecasted at 1.1% but did come in above at a total of 1.4%. The stronger than expected growth for Japan’s economy indicates further bets on Bank of Japan to raise interest rates. JPY has taken large advantages since last weeks intervention, up roughly 4.5% to the USD now and reaching a 7-month high. Markets are currently pricing a 75% chance of BoJ to raise interest rate levels in September by 25 basis points. There is also a strong probability from markets that BoJ will act in December, currently sitting at 60%. This would mean two rate hikes from the Japanese central bank.
Germany released their balance of trade in the morning session of Tuesday. We could see that its balance sheet jumped from its previous month of 15.4B. Expectations were a lift to 16B, in reality numbers came in at 21.3B. With a stronger than expected number, it was not down to a stronger export market. Germany fell short on their imports and with Germany being a manufacturing country, potentially showing concerns of businesses reducing their levels of production.
In the afternoon we have weekly employment numbers from the US being announced. On a weekly basis we have seen a little of relief with two consequtive weeks showing employment moving in the right direction. After last weeks very strong job numbers, non-farm payroll, it would not come as a surprise if weekly ADP numbers do come out higher again.
GBP/EUR 1.1635 GBP/USD 1.3520 GBP/AED 4.9674
GBP/AUD 1.8756 GBP/CHF 1.0961 GBP/CAD 1.8657
GBP/NZD 2.3155 EUR/USD 1.1604 GBP/ZAR 21.7334