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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

71% of retail investor accounts lose money when trading CFDs with this provider.

Market Insights

Trading insights: UK wage growth threatens BoE

US Dollar strengthens with Evergrande's default pressurising stocks

UK wage growth threatens BoE, Tesla and Apple drive US 100, US CPI up next

  • UK unemployment ticks higher, wage growth soars - what does it mean for the BoE? GBP/USD declines
  • Euro Area ZEW sentiment for the Euro Area misses estimates, sentiment in Germany shows brief optimism
  • Tesla rips higher on Morgan Stanley upgrade, Apple prepares for the release of the iPhone 15

GBP/USD dips below 1.250 as robust wage growth outweighs labour growth

At 06:00 am GMT, employment data out of the United Kingdom dragged GBP/USD lower, driving GBP/USD back below critical resistance, currently holding at the key psychological level of 1.250.

As wage growth continued to climb, the overall employment change missed expectations, driving the unemployment rate to 4.3%. Although the slight uptick in the unemployment rate was anticipated, the combination of a slowdown in the labour market and higher wage growth places additional pressure on the Bank of England (BoE) to implement additional rate hikes in order to avoid stagflation.

A brief summary of the report includes:

  • UK employment change (June) missed estimates at - 207 K, vs analysts forecasts of - 185 K and up from the previous - 66 K.
  • July unemployment rate rose from 4.2% to 4.3% (in-line with analyst forecasts)
  • Average earnings including bonuses beat expectations, coming in at 8.5% versus 8.2% expected.

GBP/USD daily chart

GBP/USD daily chart
Chart prepared using TradingView

EUR/USD balances rate expectations with recession risks

With ZEW sentiment data out of the Euro Area providing a mixed outlook for overall sentiment in Europe, rising recession risks prohibited a broader recovery for the Euro zone, diminishing the prospects for a rate hike at the next ECB rate decision scheduled for 14 September, 12:15 GMT.

As the United States prepares for the latest CPI report on tomorrow’s economic agenda, rate expectations are expected to remain a prominent driver of price action.

What to expect in tomorrow’s US inflation data:

  • Core inflation rate YoY (Aug) expected to decrease from 4.7% to 4.2%
  • YoY inflation (Aug) forecasted to increase from 3.2% to 3.6%
  • Core MoM inflation estimated to remain at 0.2%
  • MoM inflation rate (Aug) expected to rise from 0.2% to 0.6%

As inflation remains at the forefront of monetary policy for global central banks, any surprises in the August inflation data could drive

EUR/USD in either direction.

EUR/USD daily chart
Chart prepared using TradingView

Can Tesla continue higher?

With Apple due to release its new iPhone 15 later today, Apple shares struggled to break above $180.00 prior to the open. As investors continue to monitor the latest developments from the tech giant, prices remained cautious on fears that China’s recent ban may have longer-term effects on the firm’s profitability.

While Apple is expected to remain on the radar into the US session, Tesla’s 10% surge following the upgrade from Morgan Stanley could come into question, placing pressure on the US 100. If prices hold above $270.00, it may be possible for bullish continuation to drive prices back towards the $280.00 mark, while a break below could result in a sharper correction back toward moving average support, currently holding around $257.00

Tesla daily chart

Tesla daily chart
Chart prepared using TradingView

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Not investment advice. Past performance does not guarantee or predict future performance.