Good Morning. Today is a fairly heavy day with economic data. CPI is probably the most interesting to gauge inflation at the consumer level. At the producer level PPI for July was much “hotter” than anticipated which will not only squeeze corporate margins but also tie the Fed’s hands further in terms of expanding the balance sheet.
Industrial production and Empire State manufacturing will also offer some insight as to the health of economy. Unfortunately, a likely anti-QE speech at 8PM from Fed hawk and MN Fed President, Narayana Kocherlakota (four on the dove hawk scale) comes after the bell.
As for markets the currencies are starting to show signs of a reversal. The AUD/USD managed to close above the zone by a mere 6 pips but as of typing this post it is trading inside the zone. Not a short signal but one that increases probability the recent rally was a retracement and not the start of a new uptrend. The EUR/AUD closed inside the zone by 3 pips and is now trading above the zone and starting to show signs of a trend reversal.