European open – Markets, Argentina, UK jobs

Europe lower as Argentina returns to the headlines

It’s shaping up to be another rocky session on Tuesday, with political chaos once again driving the headlines as Argentina once again finds itself in a sticky situation.

Source – Thomson Reuters Eikon

Unfortunately, we can’t blame the Argentinian political situation for the sea of red we’re seeing globally as investors continue to fret about the global slowdown and impact of the trade war. It’s been a tough summer already and it may get tougher yet, with there being little for investors to cheer about.

The primaries in Argentina certainly caught the eye of investors though, as President Macri suffered a humiliating defeat in a damning indictment of his policy agenda that markets may like but the public does not. While the election was effectively only symbolic, it does not bode well ahead of the actual election in October and investors did not see the scale of the defeat coming. If the reaction is anything to go by, further turbulence looks guaranteed.

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GBP eyed as UK jobs data released

The pound will be back in focus for traders today as it tries to hold on above 1.20 against the dollar, despite the increased threat of no-deal Brexit and the turmoil that could bring. There may be a rare piece of good news today though as the labour market data is released. This has been a constant source of positive news for the economy and forecasts today suggest there could be more of the same.

The headline unemployment figure is expected to remain at a 44-year low of 3.8%, which is encouraging, but its the strong wage growth that could provide some rare cheer. Whether it will be enough to lift a currency that’s mired in doom and gloom Brexit headlines is another thing. Of course, a shock weak report could deliver another blow to the pound and knock it below the psychologically important 1.20 level.

Economic Calendar

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam