No important events are expected today.

China released good statistics over the weekend. Trade surplus in July for the first time since February exceeded $100 billion. European currency historically reacts positively to statistics from China, as the Celestial Empire is one of the key trading partners of the European Union. The debt market is also positive for the euro – spreads between European and American government bond yields have been growing for the last two trading days. Investors are overestimating the likelihood of aggressive tightening of monetary policy.

While at the beginning of August the market was expecting a 0.75% Fed rate hike at the September meeting, the market is now expecting a 0.5% hike. The barrel of honey is not without a fly in the ointment – today the US Treasury will hold $43.9bn treasury bond auctions, which will reduce the dollar liquidity surplus in the financial system and support the American currency. The combination of positive and negative factors points to a sideways trend during the day.

Recommendations: flat 1.0200 -1.0300.