Arguably the most important data for this week will be released later on today: the U.S. Consumer Price Index. Both headline and core CPI are expected to have risen 0.2% month-over-month in July. On a year-over-year basis, CPI is seen rising to 1.8% from 1.6% in June, while core CPI is expected to have remained unchanged at 1.7% last month. If the Producer Price Index (PPI) measure of inflation is anything to go by then CPI may also miss expectations. If so, the U.S. dollar could resume its downtrend, which could underpin buck-denominated precious metals further in these times of heightened geopolitical uncertainty.
Crude oil prices are selling off in fear! Fear that a falling stock market may slow demand and fear that a prediction by the International Energy Agency (IEA) that oil demand might be lower, might be right this time. Yet, the biggest fear that is rattling at least one major commodity brokrage firm is the exposure to the short volatility trade.
The New Zealand dollar has slumped in recent weeks, first on the back of poor NZ data and then after the RBNZ delivered a dovish policy statement, in which it suggested that monetary policy will remain accommodative for a long time.