Trading Plan – Monday 31st July 2023: Eurozone returns to growth

Mark NugentJuly 2023, Trading Plan

Trading Plan – Monday 31st July 2023: Eurozone returns to growth

Good afternoon.

The week gets off to a good start in the eurozone. Preliminary GDP numbers show a return to growth in the second quarter. Q2 GDP came in at 0.3% against an expectation of 0.2%, and a prior number of -0.1%. However, inflation remains well above target. Core inflation, excluding the volatile elements of food and fuel, was 5.5% for July on a year-by-year basis, above expectation and the same as the prior number. Headline inflation, at 5.3%, matched expectation but remains well above the central bank’s mandate.

The highlight of the week is the Bank of England on Thursday. A 25 basis-point hike is expected. More importantly, the markets will be watching closely for any signs of dovishness from the bank as significant further hikes look to be necessary to tame the worst inflation in the G7 while the UK economy is showing clear signs of stress.

As always, I go through my trading themes for the week in the video.

I’ll be back on Wednesday.

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