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Market View

Market Recap – G7 Summit

Friday, August 23, 2019 10:38 AM GMT

The European manufacturing PMI continues being below the 50 threshold, revealing a contraction of the manufacturing activity, but the number is getting higher. Germany, EU’s driving force, that invented and supports the zero government deficit policy, seems to be ready to revert to significant fiscal stimulus. At the European Commission level, Europe seems to be ready to create a $100bn fund for the European Technology sector, has already issued significant antitrust fines to US tech giants and is already blocking Chinese giants from bidding to EU tenders. In the meantime, current migration flows increase the European labor force. One may argue that Europe will never get rid of its ongoing political uncertainty (UK is set to leave, Spain has not managed to elect a new government, Italy is set to have new elections) that results to an ongoing downward pressure on EUR. Yet, judging from the EU government bond yields, markets are downplaying these political uncertainties, and this could potentially lead to a EUR rally.

Today at 15.00GMT, is the time for the long awaited public speech of Jerome Powell at the Jackson Hole summit and during the weekend the G7 summit will take place in France.

Macro releases: No significant macro release is scheduled today.


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