Europe Aims Higher, UK House Prices Rise
Fiona Cincotta September 2, 2020 3:03 AM
UK house prices jump +2% mom. Attention turn to BoE's Andrew Bailey and ADP employment data.
Unexpectedly strong US manufacturing boosted Wall Street overnight, lifting the S&P and the Nasdaq to fresh record highs. The momentum is carrying over into Europe as AstraZeneca begins its final phase of covid-19 vaccine trials and as UK house prices rise. Downbeat German retail sales having little effect on the Dax. Although the Euro remains under pressure.
Housebuilders are on the rise following more good news on house prices. Nationwide house price data showed an impressive 2% jump in house prices in August mon, following from a +1.8% gain in July. Expectations had been for a milder 0.5% rise. House prices are benefitting from the stamp duty holiday, low mortgage rates, pent up demand and people reassessing their housing needs after lock down. However, concerns are also growing that this could be a false dawn. Unemployment expected to rise to 7.5% over the coming months as the government withdraws its support from the furlough programme. Fewer people employed will undoubtedly have an impact on the housing market. This will also come as the UK leaves the EU with no trade deal in place (so far) and then in March the Help to buy scheme which has underpinned a strong rise in housebuilders in also set to expire.
Looking ahead, Bank of England Governor Andrew Bailey will take the hot seat in front of the Treasury select committee where is will discuss the economic impact of coronavirus. His comments will be key.
ADP in focus
Stateside US ADP employment data will be in focus and could drag on GBP, which has eased back from an 8-month high. Expectations are for 950,000 new job hires in the private sector versus just 167,000 in the previous month. A strong number will add to optimism surrounding the economic recovery following upbeat US manufacturing sector data. However, any disappointment could not only drag on sentiment but also pull the USD to multi year lows.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.