The final countdown

Market reports
Thanim Islam
  • EU PMIs point to contraction
  • German business sentiment in focus
  • Waiting for earnings from Microsoft and Alphabet


Both EUR and GBP continued their slide lower after PMI numbers disappointed for the month of July. Composite figures for Europe showed that activity contracted to 48.9 and for the UK and growth slowed to 50.7. USD held firm even though their composite PMI number showed growth slowed further to 52.0. However, the manufacturing number did come in higher than expected – so a silver lining in some disappointing numbers. GBPUSD and EURUSD are now both trading at their lowest for two weeks.


Market rates

* Daily move - against G10 rates at 7:30am, 25.07.23

** Indicative rates - interbank rates at 7:30am, 25.07.23

Data points


  • None today.

Our thoughts

Stocks in China rose after China’s Politburo signalled fresh support for their economy. We’re seeing a slightly soft USD this morning on the increased risk appetite
Focus falls on Europe again today with the IFO business survey numbers out for July. Anything to suggest a drop in confidence in Europe's biggest economy will likely weigh on the EUR going into Thursday's ECB meeting.
Earnings from Microsoft and Alphabet will be out today as well and we look to these numbers as a measure of what the appetite for risk will be in the markets and ultimately will have a bearing on USD pairs.

Chart of the day

Ahead of Thursday's ECB meeting, data yesterday showed that the economy has continued to perform under expectations with the economic outlook leaning more towards a contraction than a stagnation. The outlook could turn some of the ECB hawks into doves and could suggest that July’s rate hike could be the last, or even suggest that we could see rate cuts introduced by the ECB sooner rather than later. If so, we could be counting down the days until we see further weakness in the EUR.

Source: Bloomberg Finance L.P.

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