Data about American expenditure might be worrisome, but markets are interested in expenditure growth, not in balancing budgets. Brent oil is once again testing the $80 per barrel threshold, and Spain’s job market is on a steady improvement.
American Income and Expenditure
On Friday, we got a package of data on how much Americans earn and spend. The market expected income growth of 0.4%, but only got 0.2%. Expenditure, on the other hand, was expected to grow by 0.3% and that is exactly what happened. A situation where expenses grow faster than income should theoretically cause concern. Although, the fact that Americans live on credit doesn’t surprise anyone. The situation was no different this time. Maintained spending levels pacified the markets, and the dollar exchange rate once again attacked its recent highs against the euro.
Oil Searching for a Bottom, Again
In the crude oil market, the $80 per barrel level is being tested again for the past few days. The last time it was cheaper was in early June. What’s the reason for the price drop? Analysts again point to doubts about the drop in demand from China. The impact of this is so strong that it balances out tensions which arose in the Middle East following a missile attack in the Golan Heights. If it wasn’t for the attack, some markets were already starting to believe in a possible ceasefire. However, if tensions escalate, which is not unlikely following these events, an increase in oil prices can be expected. Currently, the commodity is still cheaper than last year, hence it doesn’t negatively affect inflation.
Unemployment in Spain
On Friday, we received data from Spain. Despite being a member of the common currency zone, due to the size of its economy, its impact on the euro is limited. However, it’s worth noting unemployment figures for the second quarter. 11.27% might not seem impressive from a Polish perspective, showing a result more than twice as low. But it is impressive that Spain last had a lower result in the third quarter, but in 2008. This is therefore the lowest result in over 15 years. This is very good news for Spain, but not good enough to break the euro’s recent downturn.
There are no important macroeconomic readings in today’s calendar.
Maciej Przygórzewski – chief analyst at InternetowyKantor.pl and Walutomat.pl
Source: https://ceo.com.pl/amerykanie-wydaja-wiecej-ropa-tanieje-a-bezrobocie-w-hiszpanii-spada-27084
