![\"\"](\"\/wp-content\/uploads\/2023\/08\/image-90.png\")
<\/figure>\n\n\n\nGBP \u2013 Is the UK economy in trouble?<\/h2>\n\n\n\n
The pound seems about to end the week higher against the USD and the JPY but lower than the EUR. On a fundamental level, we note the deciscion by PM Rishi Sunak who stated that the Government is commited to increasing the state pensions despite the current rate of Inflation. On a monetary level, BoE Pill stated during a BoE event yesterday that \u201cmonetary policy is now in restrictive territory\u201d, reffering to the slides predented during the August Monetary Policy Report. BoE\u2019s pill could be intepreted that the BoE may proceed with a less aggressive approach as \u201cthat monetary tightening, that policy is working\u201d, potentially indicating that the BoE may be concerned about overhiking and \u201cstrangling\u201d the economy. On a macroeconomic level, the UK\u2019s CPI rates on Wednesday came in higher than expected, implying persistent inflationay pressures. However, that may be of concern given that the Unemployment rate came in higher than expected on Tuesday combined with the lower than expected Retail sales rate released earlier today, paint a dire picture for the UK economy. As with high inflationary pressures and increasing unemployment , with a potential reduction in economic growth ,we return to last weeks moral question where the BoE, may have to consider forcing the UK economy to potentially enter a recession in order to curb inflation or try to tackle inflation over a prolonged period of time, yet such a scenario may keep economic growth at anemic levels. Lastly, we highlight next week\u2019s Housing prices rate which is due on Monday and the UK\u2019s Preliminary PMI figures on Wednesday.<\/p>\n\n\n\n JPY is about to end the week lower against the USD the pound but stronger against the EUR. On a fundamental level, we note the Trilateral Summit between the US, Japan and South Korea which is taken place today in the United States at Camp David, the presidential retreat. The summit could potentially draw the ire of China, thus potentially escalating tension. In the Asian-Pacific region. On a monetary level, we note the statements made by BoJ\u2019s Suzuki that the bank will respond appropriately to excessive moves in the FX market, prompting market analysts to consider the possibility of the Japanese Government intervening in the FX market should the exchange rates as he stated that \u201cThe government is closely monitoring market developments with a high sense of urgency\u201d. On a macroeconomic level, we highlight the the country\u2019s Preliminary GDP rates come in better than expected for both on a yoy level and on a qoq level, implying that the Japanese economy remains resilient. Aiding to the positive news was Japan\u2019s Core CPI print which was released earlier today, which seemed to imply that inflationary pressures appear to be easing on the Japanese economy. Lastly, we should note that Japan\u2019s preliminary JibunBK Manufacturing PMI figure is due to be released next Monday and Japan\u2019s Tokyo CPI rate for August is expected to be released next Friday.<\/p>\n\n\n\n EUR is about to end the week in the reds against JPY, but higher against the dollar and the pound. On a fundamental level, we highlight that according to the Financial Times, billionaire George Soros\u2019s foundation, Open Society Foundations will be scaling back its activity in Europe and will be focusing on other parts of the world. On the monetary front, we note the decision of the Italian Government to impose a 40% windfall tax on banks which rattled markets upon its announcements, has apparently caused friction with Brussels, as according to a Bloomberg report, the ECB is preparing to file a complaint for not being informed in advance of the decision. In the the event that divisions over monetary policy are intensified between members of the bloc, we may see a weakening of the ECB\u2019s decision making in the long run, with a potential less unified approach on combating inflation. On a macroeconomic level, we note the Eurozone\u2019s CPI rates that came in as expected, hinting at easing inflationary pressures in the Euro area in addition to the Eurozone\u2019s revised GDP rate for Q2 which was in line with expectations, coming in at 0.6%. Interestingly the Eurozone\u2019s Industrial production rate on a mom and yoy basis came in higher than expected, which may be considered slightly optimistic for the eurozone. Lastly, we highlight Germany\u2019s producers prices rate due on Monday, the Eurozone\u2019s , Germany\u2019s and France\u2019s Preliminary Manufacturing PMI figures and the Eurozone\u2019s Preliminary consumer confidence figure all on Tuesday. France\u2019s manufacturing business climate figure on Thursday, Germany\u2019s GDP rates for Q2 and IFO figures on Friday.<\/p>\n\n\n\n AUD is about to end for a 5th week in a row lower against the USD. On a fundamental level, we note that last week\u2019s fears regarding Australian LNG producers appear to be in fully swing, as workers begin voting to determine if they will go in strike. In the event that LNG workers decide to go on strike it possibly disrupt 10% of the world\u2019s liquified natural gas supply. On a monetary level, we note the RBA\u2019s August meeting minutes which stated that there is a \u201ccredible path back to the inflation target with the cash rate staying at its present level\u201d, implying that the bank may be willing to remain on pause in its next meeting, in order to gather data on the restrictiveness of their current monetary policy. On a macroeconomic level, we note the Australia\u2019s wage price index rate for Q2 coming in lower than expected, combined with the country\u2019s employment data indicating a loosened labour market, seem to be weighing on the Aussie. Furthermore China\u2019s worsening trade data, in particular, the reduction in imports by approximately 12.4% could be considered a very worrying sign for the Australian economy in the long run, which is predominantly dependent on Chinese demand for their exports, as such should the economic situation deteriorate in China, deteriorating economic activity with their industrial production rate come in lower than expected, seem to be painting a dire picture for Australia who is predominantly dependent on China for its exports. Lastly, we turn our attention to next week\u2019s financial releases with no major financial releases of interest for Australia, thus the pair may be dictated by financial releases stemming from the US.<\/p>\n\n\n\n The Loonie appears to be ending for a 5th week in a row in the reds against the dollar. On a fundamental level, we note the wildfires in Yellowknife, with Reuters reporting that all 20,000 residents are evacuating. On a monetary level, we note major press releases by bank officials, despite recent financial releases and as such the pair might have ceded control to financial releases stemming from Canada or could be driven by the direction of its counterparts. On a macroeconomic level, we note that Canada\u2019s Core CPI comes in higher than expected, implying that inflationary pressures still persist in the Canadian economy and as such, could lead to future implications on the economy. Moreover, given Canada\u2019s status as a major oil producer, the reduction in the price of oil could weigh on the Loonie, as over the past few days the liquid gold has moved in a downwards trajectory given heightened worries regarding China\u2019s economic recovery. Therefore, if there are worries about China\u2019s recovery, given their status as the worlds largest oil importer, Canada could be indirectly affected through lower oil prices. Lastly, we note the lack of financial releases regarding Canada next week, excepted the Retail sales rate for June which is expected to be released on Wednesday.<\/p>\n\n\n\n In the coming week we expect volatility in the FX market to increase given the high volume of financial releases which are due next. We also note that the earnings season in the US appears to be slowing down, as most high-profile companies have already released their earnings reports. Nonetheless, we would note BestBuy(#BestBuy) and Baidu (#BIDU) on Tuesday, NVIDIA (#NVIDIA) on Wednesday and Opera (#Opera) on Thursday are expected to release their earnings. As for gold\u2019s price, we note its continued decline over the week as the USD remained elevated with some US yields reaching 15-year highs. As a reminder the BRICS summit is due next Tuesday. On a more fundamental level, we highlight that tensions between China and it\u2019s western counterparts, appears to be heating up. In addition the current situation in China is deeply troubling. In our opinion, the removal of the youth unemployment figure by the Chinese Government may be indicative of a much worse economic situation that what is already being presented.<\/p>\n\n\n\n![\"\"](\"\/wp-content\/uploads\/2023\/08\/image-91.png\")
<\/figure>\n\n\n\nJPY \u2013 Japan\u2019s GDP rate indicate a strong economy<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2023\/08\/image-92.png\")
<\/figure>\n\n\n\nEUR \u2013 ECB versus Italy<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2023\/08\/image-93.png\")
<\/figure>\n\n\n\nAUD \u2013 RBA minutes indicate a credible path to the inflation target<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2023\/08\/image-94.png\")
<\/figure>\n\n\n\nCAD \u2013 Canada\u2019s CPI implies persistent inflationary pressures<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2023\/08\/image-95.png\")
<\/figure>\n\n\n\nGeneral Comment<\/h2>\n\n\n\n