Today Switzerland published its GDP growth rate reports for the second quarter of 2021, which both disappointed investors. Year-on-year growth was just 7.7% against a forecast of 9%, while the quarterly figure was 1.8% versus a forecast of 2%.
Canada also failed to meet the market’s expectations. Its trade balance for July was 0.78 billion Canadian dollars, almost twice lower than the forecast. The building permits report was also a huge letdown, coming in at -3.9%, significantly lower than expected.
As if to make up for the other disappointments, data from the United States today was quite positive. The balance of trade in the US was -70 billion US dollars, slightly higher than the forecast.
More importantly, jobless claims data also exceeded investors’ expectations. Initial claims were slightly lower than expected, as were the continuing jobless claims. Though this is good news for the US labor market, yesterday’s weak ADP data is still going to worry investors in anticipation of tomorrow’s non-farm payrolls report.
In other news, Hurricane Ida continues to trouble the United States’ east coast. Although this particular natural disaster did not have as big of an impact on the US oil industry, it has now moved further north, disrupting business and everyday life in New York, where it has claimed several lives.
As for the stock market, today we expect modest increases in all major US stock indices. The reason for this is that risk is currently the dominant sentiment among market participants, but tomorrow’s non-farm payrolls report is not allowing investors to commit to a trend yet.
Speaking of risk appetite, today the risk-loving euro reached its highest level against the US dollar in three weeks. The EUR is helped by speculation that the European Central Bank might taper its asset purchases at its policy meeting next week due to inflation hitting a multi-year high last month.
