When the macroeconomic calendar is empty, politicians resort to help traders. This is exactly what happened on Friday. Instead of boring statistics, investors were invited to contemplate the next adventures of Saudi Arabia and the United States in search of evidence of Iran's guilt in attacking the Sheikhs oil fields. And although they have not yet achieved success in this extremely difficult and dangerous event, they have already threatened the Islamic Republic with new heavenly punishments. Apparently, the fact is that they can't find any evidence of the involvement of the Persians in such a daring attack. It got to the point that the Pentagon outlined several targets for targeted attacks on Iran from resentment. Although few doubted that things will not go beyond words and threats, it is obvious that the result of all these movements will be the tightening of sanctions against the Islamic Republic. Well, this will inevitably lead to financial losses of European oil companies that are actively working in Iran. Moreover, the case may even turn into a local shortage of black gold in the Old World. Hence, it is not surprising that the single European currency was a little feverish and was thrown from side to side after the next statements by representatives of the United States.
Today, geopolitics and the appointment of the guilty have already faded into the background since preliminary data on business activity indexes in Europe have been published, from which the hairs on my head stand on end. Hence, the index of business activity in the service sector collapsed to 52.0, instead of declining from 53.5 to 53.3 as expected. But things are even worse with the index of business activity in the manufacturing sector, which fell from 47.0 to 45.6, although it was supposed to grow to 47.3. Looking at it, one gets the feeling that everyone who is screaming about the recession in the United States does not trite know where the Old World is on the globe since the economic downturn threatens Europe. A decrease in both business activity indices led to a reduction in the composite index from 51.9 to 50.4.
Composite business activity index in Europe:
But this is not the end of today's adventures, all the fun is just beginning. The fact is that preliminary data on business activity indices are published in the United States, and forecasts for them are much better than in Europe. Hence, the index of business activity in the manufacturing sector should remain unchanged at around 50.3 points. This seriously casts doubt on the cries of the inevitable recession in the United States. Rather, it will begin in Europe and alarmists just heard the word recession from someone but did not listen to where exactly. In addition, the index of business activity in the services sector may increase from 50.7 to 51.5, which ultimately will give an increase in the composite index of business activity from 50.7 to 51.2.
Composite business activity index in the United States:
It turns out that not only European statistics but also American ones will put pressure on the single European currency. Therefore, there is a high probability of its decline as much as 1.0925.
The pound is pressed not only by weak data on business activity indexes in Europe but also by expectations on similar data in the United States. The situation is exacerbated by the bankruptcy of one of the largest British travel companies and the need to urgently take out thousands of subjects Her Majesty from various resorts, which will cost not a small amount of money. So, the pound may well finish the day at 1.2350.
