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Fed Receives Another Signal, Britain Rises, But Doubts

The main event of yesterday was the publication of another portion of inflation statistics from the United States. This time it's manufacturing inflation. Yes, it is less important for the Fed than the consumer one, since it is more volatile and subject to the conjuncture of the same commodity markets. Nevertheless, you and I understand that an increase in production prices will inevitably lead to an increase in prices for final products.

So, inflation came out at the level of 7.8%, in order to better understand a lot or a little of it, let's just write it down - this is the maximum value in the entire history of observations. In order to somehow reduce the degree of tension in this regard, we note that industrial inflation has been monitored for years since 2010. Nevertheless, the numbers for the Fed are simply awful, since they once again remind the Central Bank that it is completely failing its basic function (ensuring the stability of the national monetary unit).

And then, as luck would have it, data on jobless claims showed the lowest values since before pandemic times, a hint from the Fed that there are fewer problems with the labor market. So our desire to buy the dollar and sell on the US stock market has only strengthened after yesterday's data.

We have also strengthened our desire to sell oil. After the IEA lowered its own forecasts for oil demand in 2021 by about 550K b / d. In addition, the situation in the pandemic continues to deteriorate almost all over the world - in Japan, the spread of the virus as a result of the Olympics got out of control, in Australia the worst situation since the beginning of the pandemic, even China, with its hundred cases a day, closes the third largest port in the world to prevent the spread of the virus.

The British economy tried to emit some optimism yesterday, which showed growth in the second quarter. But this did not help the pound much, because the GDP is still lower to the pandemic level. The very same GDP growth is associated with a local jump in consumption due to the exit from the lockdown (mostly people rushed to treat the sores that accumulated during the pandemic, which provoked the growth of the country's GDP as a whole), and the future is frankly scary. So we continue to sell the pound against the dollar.