Moody's in the global macro-economic forecast for 2016 - 2017: "We expect that the Russian economy in the second half of this year will begin to exit from the recession, due to lower oil and gas prices and, consequently, a fall in GDP and a sharp devaluation of the ruble"

According to analysts, import substitution policy had a positive impact on improving the performance of a number of manufacturing industries (such as agriculture and the chemical industry), which, in turn, has led to growth of industrial production by 1.7% year on year. "The outlook revision reflects the growth of Russia and these events are testament to the fact that the restructuring of the Russian economy is faster than we expected before"..

The agency has improved the outlook for the Russian economy to -0.5% in 2016 and +2% in 2017. Earlier, Moody's analysts expect the reduction of Russia's GDP by an average of 1.5% in 2016 and moderate growth in 2017.

EUR/USD 1.1350 (EUR 605m)

USD/JPY 101.00 (USD 1.46bln) 103.00 (USD 877m) 104.00 (1.08bln)

AUD/USD 0.7650 (AUD 640m)

USD/CAD 1.2990-1.3000 (USD 756m)

AUD/NZD 1.0700 (AUD 310m) 1.0710-12 (AUD (485m)

Rumors that the UK prime minister May said to want to trigger Art. 50 before French, German votes.

If this is the case it would be a confirmation of the withdrawal calendar and the markets could like this - sell the rumors, buy the facts.

Retail sales edged down 0.1% to $44.1 billion in June. Weaker sales at food and beverage stores and general merchandise stores offset higher sales at motor vehicle and parts dealers.

Sales were down in 7 of 11 subsectors, representing 54% of retail trade.

After removing the effects of price changes, retail sales in volume terms declined 0.3% in June.

Weaker sales at food and beverage stores and general merchandise stores

Food and beverage stores (-1.5%) recorded the largest decrease in dollar terms among subsectors in June. After advancing 6.4% in May, sales at beer, wine and liquor stores were down 4.7%, the largest monthly drop since June 2013. Receipts at supermarkets and other grocery stores fell 0.9% in June. Following three months of declines, sales at specialty food stores posted a 1.1% gain. Sales at convenience stores were up 0.3%.

General merchandise stores recorded a 1.5% sales decrease in June, down for the second month in a row.

Sales at building material and garden equipment and supplies dealers (-1.9%) fell for the third time in four months.

Clothing and clothing accessories stores posted a 1.7% sales decline in June. Sales at clothing stores (-1.7%) and shoe stores (-3.6%) were down, following gains in May. Jewellery, luggage and leather goods stores recorded a 1.1% sales increase.

The Consumer Price Index (CPI) rose 1.3% in the 12 months to July, after increasing 1.5% in June.

Excluding gasoline, the CPI was up 1.9% year over year in July, matching the gain in June.

Prices rose in six of the eight major components in the 12 months to July, with the shelter and food indexes contributing the most to the year-over-year gain in consumer prices. The transportation index, which includes gasoline, and the clothing and footwear index declined on a year-over-year basis in July.

The transportation index was down 0.2% in the 12 months to July, after rising 1.1% in June. Gasoline prices declined more year over year in July (-14.0%) than in June (-8.5%); on a monthly basis, gasoline prices fell 5.6% in July. On a year-over-year basis, the purchase of passenger vehicles index (+5.4%) and the city bus and subway transportation index (+2.1%) rose less in July than in June.

The clothing and footwear index decreased 0.4% year over year in July, after posting a 1.2% gain in June. This turnaround was partly attributable to a decline in the women's clothing index in the 12 months to July (-0.4%), following a year-over-year increase in June (+2.2%). Compared with the same month a year earlier, shoppers also paid less for children's clothing and men's clothing in July.

EUR/USD

Offers : 1.1335 1.1350 1.1380-85 1.1400 1.1425-30 1.1450

Bids : 1.1300 1.1280 1.12501.1230 1.1200 1.1185 1.1150

GBP/USD

Offers : 1.3160 1.3180-85 1.3200 1,3230 1.3250 1.3270 1.3300

Bids : 1.3110 1.3100 1.3080-85 1.3050 1.3030 1.3000 1.2980 1.2950

EUR/GBP

Offers : 0.8650 0.8685 0.8700 0.8725-30 0.8750

Bids : 0.8600 0.8585 0.8570 0.8550 0.8530 0.8500

EUR/JPY

Offers : 113.80 114.00 114.30 114.50 114.75 115.00

Bids : 113.50 113.25-30 113.00 112.75-80 112.50 112.30 112.00-10

USD/JPY

Offers : 100.30 100.50 101.00 101.25-30 101.50

Bids : 100.00 99.85 99.65 99.50 99.30 99.00 98.80 98.50

AUD/USD

Offers : 0.7650 0.7680 0.7700 0.7725-30 0.7750-55 0.7785 0.7800

Bids : 0.7620-25 0.7600 0.7585 0.7565 0.7550 0.7500

"There will be a strong focus on Janet Yellen's speech at Jackson Hole on 26 August and the next US non-farm payrolls release set for 2 September. We expect markets to reprice Fed rate hike expectations and the USD to rally.

...The US Federal Reserve has begun to lay the groundwork for a September rate hike, in our view. The resulting pickup in US front-end rates should mean that the USD has bottomed out in the short term, paving the way for a broad recovery in the coming weeks. Dependent on the extent to which an adjustment of expectations of future Fed policy also challenges the risk environment, we would expect USD gains to be most pronounced versus the commodity-exporting currencies in the G10. However, with the Fed unlikely to embark on a regular series of hikes, we do not expect a large adjustment in the US curve and doubt the USD will gather much momentum.

In addition to the Fed and the US there are several other factors that will play a key role in determining the foreign exchange market trend.

The equity market's response will be critical, especially as regards the AUD and NZD. Our STEER model indicates that global equities are the principal driver of these currencies Of the five input factors that constitute our STEER model (2 year-swap rates, relative yield curve slope, commodity prices, relative equities and global equities), the co-efficient for global equities is, by some margin, the highest. Global equities have supplanted the traditional drivers of relative yields and commodity prices. As represented by the US S&P 500 Index, they have recently posted record highs. If such bullish momentum is threatened by increasing US rate-hike expectations, the AUD and NZD would be very vulnerable to a reversal.

The AUD is particularly at risk as our FX Positioning Analysis signals that it is the second-most-owned currency among the G10 group. We forecast 0.68 on AUDUSD by year end.

The GBP also appears extremely vulnerable. This week's relief rally, following robust unemployment data and the surprise rebound in July retail sales, is unlikely to prevent a sharp GDP output decline to zero in the UK that our economists forecast for the next three quarters. The retail sales jump is likely to prove a temporary, weather-related phenomenon. The greatest risk comes from the dramatic decline in the PMI surveys for both manufacturing and non-manufacturing surveys. Both have fallen to multi-year lows and suggest the BoE will need to ease policy further. UK output data, especially the September PMI surveys, will be pivotal for the GBP".

Copyright © 2016 BNP Paribas™, eFXnews™

Public sector net borrowing (excluding public sector banks) decreased by £3.0 billion to £23.7 billion in the current financial year-to-date (April to July 2016), compared with the same period in 2015.

Public sector net borrowing (excluding public sector banks) was in surplus by £1.0 billion in July 2016; a decrease in surplus of £0.2 billion compared with July 2015.

Public sector net debt (excluding public sector banks) at the end of July 2016 was £1,604.2 billion, equivalent to 82.9% of gross domestic product (GDP); an increase of £35.3 billion compared with July 2015.

This is the second successive month of debt falling on the year as a percentage of GDP and indicates that GDP is currently increasing (year-on-year) faster than net debt excluding public sector banks. However, care should be taken when inferring trends from only two months' data, especially given the provisional nature of centred GDP estimates for the latest month.

Central government net cash requirement decreased by £5.1 billion to £22.2 billion in the current financial year-to-date (April to July 2016), compared with the same period in 2015.

The government, having burned through much of its foreign currency reserves, faces a crushing debt burden and is having trouble meeting its civil service payroll. On Thursday, the central bank hiked its benchmark interest rate by a remarkable 4.5 percentage points to 15 percent to prop up the tugrik, the world's worst performing currency in August.

Mongolia, a mineral-rich and landlocked $12 billion economy bordering Russia and China, is staring at a full-blown balance of payments crisis. It's caused barely a ripple in global financial markets, but the nation's economic meltdown offers instructive lessons to far bigger resource-reliant economies like Brazil, Venezuela, Russia and Saudi Arabia.

This is an economy that gives new meaning to what economists call the resource curse. An overabundance of natural resources can result in lopsided economic growth, government waste and boom-bust cycles that can leave a country's finances in tatters.

*source: bloomberg.com

EUR/USD 1.1350 (EUR 605m)

USD/JPY 101.00 (USD 1.46bln) 103.00 (USD 877m) 104.00 (1.08bln)

AUD/USD 0.7650 (AUD 640m)

USD/CAD 1.2990-1.3000 (USD 756m)

AUD/NZD 1.0700 (AUD 310m) 1.0710-12 (AUD (485m)

The US dollar was moderately higher against major currencies after it reached new lows yesterday, nevertheless, under pressure after the FOMC minutes. The minutes reported that the leaders of the Central Bank tried to leave the door open for a rate hike. They also tried to come to a unified assessment of prospects for the economy. In general, reports signaled that rates could be raised as early as September, but the Central Bank will not act as long as the majority of its leaders will not come to a consensus regarding the outlook for the economy, employment and inflation. According to the futures market, the probability of a Fed rate hike is 18% in September and at the December meeting is estimated at 42.8% versus 41.7%.

Also yesterday yesterday the president of the Federal Reserve Bank of San Francisco John Williams said the central bank should start raising interest sooner rather than later. With this statement, Williams joined the growing number of Fed leaders who believe that the economy is strong enough to withstand higher borrowing costs, as well as the fear of exceeding the inflation target set by the Fed.

"In the context of a strong domestic economy with good momentum, it makes sense to start a gradual increase in interest rates, preferably - sooner rather than later," - said Williams.

Next week, Fed Chairman Janet Yellen will deliver a speech at the annual conference of the central bank in Jackson Hole. Investors will be closely watching for hints of further Fed action with respect to monetary policy.

The yen has weakened slightly since the beginning of the session, but the USD / JPY pair has no clear direction because of the lack of new signals.

Activity index for large enterprises of all industries of Japan increased by 1.0% in June, after falling 1.0% in May. Analysts had expected an increase of 0.9%. This indicator estimates the capital costs of all sectors except the Japanese financial industry and is considered a leading growth performance.

The New Zealand Dollar was down against the US dollar: "The key factor determining the dynamics of the New Zealand dollar, are the prospects for US monetary policy, while the RBNZ policy has no significant impact on the prospects for the New Zealand currency" - say BNZ.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1447 (3604)

$1.1426 (4661)

$1.1397 (4631)

Price at time of writing this review: $1.1338

Support levels (open interest**, contracts):

$1.1294 (1005)

$1.1241 (2401)

$1.1170 (2727)

Comments:

- Overall open interest on the CALL options with the expiration date September, 9 is 53031 contracts, with the maximum number of contracts with strike price $1,1250 (4980);

- Overall open interest on the PUT options with the expiration date September, 9 is 57909 contracts, with the maximum number of contracts with strike price $1,1000 (5831);

- The ratio of PUT/CALL was 1.09 versus 1.06 from the previous trading day according to data from August, 18

GBP/USD

Resistance levels (open interest**, contracts)

$1.3404 (2190)

$1.3306 (3124)

$1.3210 (1927)

Price at time of writing this review: $1.3145

Support levels (open interest**, contracts):

$1.3090 (1047)

$1.2994 (2185)

$1.2896 (2027)

Comments:

- Overall open interest on the CALL options with the expiration date September, 9 is 32360 contracts, with the maximum number of contracts with strike price $1,3300 (3124);

- Overall open interest on the PUT options with the expiration date September, 9 is 26128 contracts, with the maximum number of contracts with strike price $1,2800 (2478);

- The ratio of PUT/CALL was 0.81 versus 0.81 from the previous trading day according to data from August, 18

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

"USD/JPY has been trading through the graphical support of 100. Short term indicators have been posting positive divergence however a meaningful recovery has so far remained elusive. Short term, a retest of recent lows at 98.90/98.20, also a projection for the down move can't be ruled out. However this will remain a crucial level.

In case this gives way, USD/JPY will head for a deeper down move with next projections at 97/96.80 initially. 100.60 is an immediate resistance while hourly descending trend at 101.40 will affirm early signs of recovery.

AUD/USD tested the neckline of the inverted H&S at 0.7780. The pattern highlights significance of the stabilization after a steady downtrend until January this year.

A break above 0.7780 will confirm the formation and indicate extension in rebound towards last May highs of 0.8160".

Copyright © 2016 Societe Generale, eFXnews™

The activity index for large enterprises of all industries increased by 1.0% in June, after falling -1.0% in May. Analysts had expected an increase of 0.9%. This estimates the capital costs of all sectors except the Japanese financial industry and is considered a leading growth performance.

Visitor arrivals numbered 237,900 in July 2016, setting a new July record, Statistics New Zealand said today. Visitor arrivals were up 14 percent from July 2015, due mainly to a 21 percent increase in holiday arrivals.

"More holidaymakers from Australia, China, and the United States boosted the holiday arrival numbers this month," population statistics manager Jo-Anne Skinner said. "This is the first time that holiday visitor arrivals from Australia have exceeded 50,000 in a July month."

In the July 2016 year, visitor arrivals hit a record 3.34 million, up 11 percent from the July 2015 year.

In July 2016 the index of producer prices for industrial products fell by 2.0% compared with the corresponding month of the preceding year. In June 2016 the annual rate of change all over had been -2.2%.

Compared with the preceding month June 2016 the overall index rose by 0.2% in July 2016 (+0.4% in June and in May).

In July 2016 energy prices decreased by 6.2% compared with July 2015, prices of intermediate goods by 1.8%. In contrast prices of non-durable consumer goods rose by 0.4%, prices of capital goods by 0.5% and prices of durable consumer goods by 1.2%.

The overall index disregarding energy decreased by 0.5% compared with July 2015 and rose slightly by 0.2% compared with June 2016.

(pare/closed(GMT +3)/change, %)

EUR/USD $1,1352 +0,57%

GBP/USD $1,3160 +0,91%

USD/CHF Chf0,9547 -0,78%

USD/JPY Y99,92 -0,28%

EUR/JPY Y113,42 +0,25%

GBP/JPY Y131,48 +0,62%

AUD/USD $0,7684 +0,35%

NZD/USD $0,7286 +0,45%

USD/CAD C$1,2772 -0,60%

(time / country / index / period / previous value / forecast)

04:30 Japan All Industry Activity Index, m/m June -1% 0.9%

06:00 Germany Producer Price Index (MoM) July 0.4% 0.1%

06:00 Germany Producer Price Index (YoY) July -2.2% -2.1%

08:30 United Kingdom PSNB, bln July -7.31 1.2

12:30 Canada Retail Sales, m/m June 0.2% 0.5%

12:30 Canada Retail Sales YoY June 3.6%

12:30 Canada Retail Sales ex Autos, m/m June 0.9% 0.3%

12:30 Canada Consumer Price Index m / m July 0.2% -0.1%

12:30 Canada Consumer price index, y/y July 1.5% 1.3%

12:30 Canada Bank of Canada Consumer Price Index Core, y/y July 2.1% 2.1%