UK Q2 GDP on the agenda today
The meltdown in gold and silver are stealing the headlines once again, as we see a further drop in the former under $1,900 to start the day. The latter is down another 3% in a fall back under $24 as the violent pullback extends.
There's no trying to pick a bottom in times like these as buyers will now have to be patient and wait for the other end of the technical exhaustion.
The fact that Treasury yields are extending higher - 10-year yields back up to 0.65% - is also a factor for the recent retreat. But as long as real yields stay negative and aren't changing course, gold should stay underpinned in the longer-term narrative.
For today, the dollar is staying underpinned after the retreat in equities overnight. The fall in precious metals is also helping with that in general as we EUR/USD down to 1.1720 and AUD/USD down to 0.7115 going into European trading today.
Looking ahead, there is little on the agenda to shift the dial in markets as the focus will stay on the risk mood as well as the continued correction in precious metals.
0600 GMT - UK Q2 preliminary GDP report
Prior (Q1) report can be found here. There isn't going to be much in here to tell us much of anything new. Q2 will mark the sharpest drop in GDP in the UK on record, as the economy gets ravaged by the pandemic. The release here shouldn't have much of an impact on the market considering what has already been factored in over the past few months.
0600 GMT - UK June monthly GDP figures
0600 GMT - UK June industrial, manufacturing, construction output
Prior release can be found here. June economic activity should show a modest rebound relative to May but in the context of Q2, it isn't a pretty picture for the UK economy. Domestic conditions should show an added improvement towards the end of the quarter, but nowhere near pre-virus levels and that remains the story for now.
0600 GMT - UK June trade balance data
Prior release can be found here. Trade conditions should reflect some continued pickup as domestic conditions improve, but should remain much more subdued compared to pre-virus levels - a similar narrative for most countries across the globe.
0900 GMT - Eurozone June industrial production data
Prior release can be found here. Factory output should show a continued rebound in June as lockdown measures ease, but this isn't of much relevance as it pertains to Q2 data.
1100 GMT - US MBA mortgage applications w.e. 7 August
Weekly US housing data, measures the change in number of applications for mortgages backed by the MBA during the week.
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
