According to Nationwide, the growth rate of real estate prices in the UK slowed down from 0.6% to 0.5%. Also, the index of business activity in the construction sector of the same United Kingdom fell from 48.6 to 43.1. All indicators relate exclusively to the real estate market and the state of which is one of the main factors in determining the investment attractiveness of the UK. Hence, looking at this sad picture, it is not surprising that investors continued to systematically buy portraits of dead American presidents.
However, the role of the hero of the cape and the dagger this time was performed by the single European currency, which simply mysteriously became more expensive. True that not for long and already in the second half of the day she threw off her mask of a villain and followed the example of her geographical neighbors. It happened that it became more expensive just before the publication of data on producer prices in Europe. Forecasts for which were extremely depressing, as they expected a slowdown in their growth rates from 2.6% to 1.7%. The persistent growth of the single European currency indicates that the major players have decided to go on the opposite, quite possibly guessing that the reality will be even worse so that they can then actively buy the depreciating dollars. This happened because of the fact that the growth rates of producer prices slowed down to 1.6%, which seriously reduces the growth potential of inflation.
Before the opening of the American session, the single European currency with the pound can get a good opportunity for growth. First of all, it is due to the final data on the index of business activity in the services sector in Europe, which should confirm the fact of its growth of 52.9 to 53.4. Largely due to this, the composite index of business activity can grow from 51.8 to 52.1. Although investors at the time of the publication of the preliminary assessment laid all this in the cost of a single European currency, a symbolic rebound is needed at least after a couple of days of confident downward movement like air. Hence, the final data on business activity indices will be most welcome. Meanwhile, the UK business services index should remain unchanged.
But in the evening, the fun will begin and the dollar will once again be on a horse. Do not forget that today is the pre-holiday day since tomorrow, the United States is celebrating Independence Day and the report of the Ministry of Labor will be published on Friday. Therefore, today is the last day when investors can still prepare for such a significant event. Moreover, today there is a lot of interesting data on the labor market. In particular, ADP data on employment showed its growth by 140 thousand versus 27 thousand in the previous month. Also, the total number of applications for unemployment benefits should be reduced by 17 thousand. This can occur due to a decrease of 13 thousand in the number of repeated applications for unemployment benefits and in primary applications by 4 thousand. Against this background, the total data on the index of business activity in the service sector should decrease from 50.9 to 50.7, as well as the composite index is expected to decline from 50.9 to 50.6, which will be completely ignored. Moreover, the final data should only confirm the preliminary assessment. While American investors received a portion of positive emotions from the data on the labor market, they will celebrate Independence Day with a clear conscience.
Before the opening of the American session, the single European currency will rise in the direction of 1.1300 but in the late afternoon, it is worth waiting for its decline to 1.1250.
The pound scenario is similar, and first it is worth waiting for its gradual growth in the direction of 1.2600, and then decline to 1.2525.
