Action Insight Mid-Day Report 8-9-19

Sterling Tumbles as GDP Contraction Raises Recession Fears

Action Insight Mid-Day Report 8-9-19 Sterling Tumbles as GDP Contraction Raises Recession Fears Sterling weakens broadly today as surprised contraction in Q2 UK GDP raised concerns of recession. In the background, risk of no-deal Brexit continues to weigh on sentiments. Canadian Dollar is suffering some renewed selling in early US session after worse than expected job data. Dollar is not much better though as core PPI slowed. On the other hand Yen and Swiss Franc are the strongest today, as risk sentiments turned soft, and German 10-year yield hits new record low of -0.605. Technically, GBP/USD breaks 1.2079 to resume recent decline and should target 1.1946 low next. GBP/JPY breaks 128.11 to resume recent fall to 122.36 low. EUR/GBP is picking up some upside momentum for 0.9305 key resistance next. With selloff in Canadian Dollar, USD/CAD could have a test on 1.3345 temporary top and break will resume recent rebound from 1.3016. In Europe, FTSE is down -0.04%. DAX is down -1.07%. CAC is down -0.84%. German 10-year yield is down -0.022 at -0.577. Earlier in Asia, Nikkei rose 0.44%. Hong Kong HSI dropped -0.69%. China Shanghai SSE dropped -0.71%. Japan 10-year JGB yield dropped -0.029 to -0.219. Full Report Here Canada unemployment rate rose to 5.7%, US PPI unchanged at 1.7%,... German DIHK: A weak zero growth in export this year is... UK GDP contracted -0.2% in Q2, first contraction since 2012 Japan GDP grew 0.4% in Q2, solid investments despite weak exports RBA Lowe said economy reached a gentle turning point, but growth... UK Raab: No-deal Brexit is EU’s responsibility to bear Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol China’s PPI Returns to Deflation, PBOC Probably Cuts Rate in September RBNZ Cut Policy Rate by -50 bps, Hinting Negative Interest Rate US’ Designation of China as Currency Manipulator Makes it Harder to... Central Bank Views | China Watch | Oil N' Gold | Special Topics GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.2093; (P) 1.2137; (R1) 1.2180; More... GBP/USD's break of 1.2079 temporary low suggests fall resumption. Intraday bias is back on the downside for 1.1946 low. Break will target 100% projection of 1.4376 to 1.2391 from 1.3381 at 1.1396. On the upside, above 1.2209 minor resistance will turn intraday bias neutral and bring consolidations again first. Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings RBA Statement on Monetary Policy Sees Deterioration in Outlook Pound Through $1.21 On Heightened Recession Fears US500 Index Slips To Retest 50-SMA But Bullish Bias Not Faded Yet US Open – Italy, UK GDP, Gold, Oil Yen Firms Again As Trade Jitters Return, Euro And Pound Steady Despite Election Talk Italian Political Risk On The Rise USDCAD Bulls Get Rejected From 200-Day SMA, Bias Bullish-To-Neutral Fundamental Analysis | Technical Analysis In-depth Reports US-China Trade: Three Trade War Scenarios – 'No Deal' Now Our Baseline RBNZ Cut Policy Rate by -50 bps, Hinting Negative Interest Rate US' Designation of China as Currency Manipulator Makes it Harder to Reach Trade Deal FX Strategy: USD/CNY Breaks 7 But Devaluation is Not On the Cards Brexit Monitor: There is Always a But Brexit Update - New PM, Old Challenge Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 23:50 JPY Japan Money Stock M2+CD Y/Y Jul 2.40% 2.30% 2.30% 23:50 JPY GDP Q/Q Q2 P 0.40% 0.10% 0.60% 23:50 JPY GDP Deflator Y/Y Q2 P 0.40% 0.40% 0.10% 01:30 CNY CPI Y/Y Jul 2.80% 2.70% 2.70% 01:30 CNY PPI Y/Y Jul -0.30% 0.00% 0.00% 01:30 AUD RBA Statement on Monetary Policy 05:45 CHF Unemployment Rate Jul 2.30% 2.30% 2.30% 06:00 EUR German Trade Balance (EUR) Jun 18.1B 18.5B 18.7B 08:30 GBP GDP M/M Jun 0.00% 0.10% 0.30% 08:30 GBP GDP Q/Q Q2 P -0.20% 0.00% 0.50% 08:30 GBP GDP Y/Y Q2 P 1.20% 1.40% 1.80% 08:30 GBP Industrial Production M/M Jun -0.10% -0.20% 1.40% 08:30 GBP Industrial Production Y/Y Jun -0.60% -0.30% 0.90% 0.50% 08:30 GBP Manufacturing Production M/M Jun -0.20% -0.20% 1.40% 08:30 GBP Manufacturing Production Y/Y Jun -1.40% -1.10% 0.00% -0.20% 08:30 GBP Construction Output M/M Jun -0.70% -0.40% 0.60% 0.30% 08:30 GBP Construction Output Y/Y Jun -0.20% 0.20% 1.70% 1.30% 08:30 GBP Index of Services 3M/3M Jun 0.10% 0.20% 0.30% 0.20% 08:30 GBP Visible Trade Balance (GBP) Jun -7.0B -11.3B -11.5B 12:15 CAD Housing Starts Jul 222K 210K 246K 12:30 CAD Net Change in Employment Jul -24.2K 10.0K -2.2K 12:30 CAD Unemployment Rate Jul 5.70% 5.50% 5.50% 12:30 USD PPI M/M Jul 0.20% 0.20% 0.10% 12:30 USD PPI Y/Y Jul 1.70% 1.70% 1.70% 12:30 USD PPI Core M/M Jul -0.10% 0.20% 0.30% 12:30 USD PPI Core Y/Y Jul 2.10% 2.30% 2.30%

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