The day began with a surprisingly positive trade report from Japan, though machinery orders were down -22.5%. The Japanese economy was in a state of recession even before the coronavirus pandemic began and is set to experience a rocky recovery, which is why each report matters.
Inflation seems to be growing better than expected in the United Kingdom, where the report for July showed an inflation of 1% versus a forecast of 0.6%. Core inflation is 1.8% against a prediction of just 1.3%. Nevertheless, investors are a bit skeptical of this data as the current situation might make it difficult to measure prices accurately.
For the eurozone, the core inflation rate was in line with the forecasts at 1.2%. This is despite tax cuts, which makes the report all the more impressive.
The day will end with the publication of the minutes from the Federal Reserve’s most recent policy meeting, which are likely to reveal quite a bit about the state of the economy of the United States. More specifically, investors will be searching for clues for further stimulus from the central bank, which is made more likely by Congress’ own inability to issue timely stimulus packages.
Meanwhile, there is finally some progress in the negotiations between Democrats and Republicans on a new stimulus bill, with both sides ready to compromise after nearly one month of talks.
Looking at the coronavirus pandemic, today the number of cases worldwide is 22.3 million. The United States and Brazil both experienced daily increases below 50,000 yesterday. It was not for the first time in the US, but it is especially good news for Brazil. In India, however, there were over 62,000 new cases yesterday.
