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They do not go anywhere yet! Our favorite series was extended for another season!
To be precise, the British parliament made a strong-willed and extremely difficult decision, banning the secession from the European Union without a divorce agreement. So Boris Johnson is now tied hand and foot and the only thing he can do now is to knock out an agreement that suits the House of Commons from Brussels. Given the fact that until October 31, there is practically no time for negotiations and Brexit is once again postponed. However, it is precisely against this that the current Prime Minister is speaking. He swore right on his blood that he would withdraw the United Kingdom from the European Union as soon as possible. For the sake of this, he staged the whole performance with the suspension of the parliament so that he could not stop him from blackmailing Europe with the threat of an unregulated Brexit and forcing Brussels to sign an agreement that he would impose on him. But in order to implement such a grandiose and cunning plan, he needed to block the parliament's work in such a way that there wouldn't be this window in four days, for which the parliamentarians had time to draft a whole bill and pass it in a short time. So to speak, Boris Johnson underestimated his opponents. This was most vividly expressed yesterday by Jeremy Corbin, who said that Boris Johnson had already ruined the Conservative Party, and asked him not to ruin the country as well. there is no doubt that the European Union will give Britain a new respite because Donald Tusk offered it right after Boris Johnson took office as Prime Minister of the United Kingdom. In turn, the fact of reducing the risks of the onset of unregulated Brexit had a very positive effect on the value of the pound.
The single European currency also grew vigorously and optimistically but not only because investors were able to breathe out at least a little. The situation with Brexit is only one of the factors of strengthening the single European currency. No less important aspect was the European statistics, which turned out to be slightly better than forecasts. Thus, the index of business activity in the service sector grew from 53.2 to 53.5, while they expected growth to 53.4. The composite index of business activity, which was supposed to grow from 51.5 to 51.8, grew to 51.9. The retail sales data also turned out to be better than forecasts -the growth rate of which was supposed to slow down to 2.0%. In fact, they decreased from 2.8% to 2.2%.
European Service Business Activity Index:
Composite business activity index in Europe:
European retail sales growth rates:
Now, after the market has corrected a number of imbalances and to some extent eliminated the obvious overbought dollar, investors can pay close attention to US statistics. Moreover, there is no shortage of it today. Of course, the main news is ADP employment data, which traditionally precedes the monthly report of the United States Department of Labor. It is expected that employment will increase by 149 thousand against 156 thousand in the previous month, which at first glance, the decline in employment growth is a negative factor. However, if we recall that in the previous month, employment increased from 112 thousand to 156 thousand, then a slight slowdown of 7 thousand does not seem such a terrible event. Do not forget that data on applications for unemployment benefits will still be published today and the total number of which may decrease by 13 thousand. And of course, the final data on the index of business activity in the service sector, along with the composite index are also to be released. Preliminary data showed a decrease in the index of business activity in the services sector from 53.0 to 50.9 and the composite index from 52.6 to 50.9. However, we must not forget that the final data on the index of business activity in the manufacturing sector turned out to be significantly better than the preliminary data, so it is highly likely that the same story can happen with today's data.
Employment Change in the United States:
US Service Activity Index:
US Composite business activity index:
The Pound/Dollar currency pair is rapidly returning to its position, where the historical minimum remains behind as much as 280 points. Given a rather positive information background, we can gain a foothold in the region of current values, concentrating within the correction maximums of the end of August.
The Euro/Dollar currency pair already has a significant correction, fixing above the psychological level of 1.1000. It is likely that the correction will continue to exist in the market, where a temporary amplitude in the region of 1.1000/1.1050 is possible.
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