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The global tourism industry has faced unprecedented challenges during the COVID-19 pandemic and companies in the sector have suffered significant losses. However, as the world recovers and travel restrictions finally come to an end, the industry is now poised for a resurgence. A successful summer season on the horizon brings new hope to the afflicted industry. As travel resumes, equity prices in the tourism and travel sector are expected to show positive momentum. The market reaction to the reopening of borders and the resumption of international travel is likely to be reflected in the share prices of companies in the industry.   While the industry is on track to recover, it is important to note that reaching pre-pandemic levels may not happen immediately for all companies. The losses incurred during the pandemic have had a significant impact on the financial position of many tourism enterprises. Some companies are still striving to recover losses and restore financial stability, but here’s a look at the prospects for individual sectors of the tourism industry:   Airlines: Companies such as Lufthansa and other major airlines have been hit hard by the pandemic. As demand for travel increases, airline shares are expected to rise. However, the recovery of airline inventories will depend on various factors, including vaccination rates, travel regulations and consumer confidence in air travel.   Online booking platforms: Platforms such as Airbnb and Booking.com are likely are likely to benefit from the resurgence of the travel industry. As travelers start planning their trips, the demand for online booking services is expected to increase. Hence, these platforms may see their stock prices rise as they gain momentum.    Hotels: The hospitality sector has faced major challenges during the pandemic. As travel resumes, hotels are expected to reopen. However, the pace of recovery may vary depending on factors such as location, travel restrictions and the ability to meet changing consumer preferences, such as an increased focus on hygiene.    In terms of the impact of inflation on the travel industry, rising prices have the potential to affect both the market and share prices. Higher prices may lead to higher spending on travel-related services, which may affect consumer behavior and demand. Companies operating in the travel industry will need to carefully manage their pricing strategy to balance profitability and affordability for customers.   When it comes to investment opportunities, it is extremely important to do a thorough research and consider various factors before making an investment decision. While the share prices of some travel companies may have risen significantly, there may still be room for growth. Further development of stock prices in the near future will depend on factors such as the pace of the global recovery, travel trends, company performance and market dynamics against the backdrop of Fed policy.

US ADP and JOLTs data a key focus today. European markets have fallen every day this week, although yesterday's losses were by far the worst, and look set to continue again today. US markets also struggled yesterday, although their losses have been much more modest. Yesterday's weakness was driven by concerns over softer than expected Chinese as well as European services PMIs, which fed into increased slowdown worries, as well as rising interest rate risk, which fed into weakness in basic resources, energy and financials, and has translated into further weakness in Asia markets.     Today's Germany factory orders numbers for May could signal a brief respite after 2 months of weakness with a rebound of 1%, up from -0.4% in April, although on an annualised basis it is expected to decline by -9.7%, the 15th month in a row it's been in negative territory.       The release of last night's Fed minutes showcased some significant splits amongst policymakers over the decision to signal a rate pause in June, citing "few clear signs" of progress that US inflation was falling quickly enough.     Some officials wanted to carry on with rate hikes of 25bps but given the "uncertainty" about the outlook it was decided a pause would be preferable, just so long as it was made clear that the door to a July hike, as well as further hikes was pushed to the top of the narrative. This helps to explain the very hawkish guidance with no rate cuts expected by Fed officials until 2024.     The publication of the minutes, and the clear willingness amongst many members to do more on rates saw US 2-year yields close higher on the day, wiping out their early declines.     The committee noted the strength of the US labour market saying it "remained very tight" evidence of which is likely to be borne out by today's data from the JOLTS data for May, the latest weekly jobless claims and the June ADP payrolls report, as well as the latest ISM services numbers.     The resilience of the US labour market was no better illustrated than in the April JOLTS report which saw vacancy numbers surge back above 10m from 9.7m in March. Today's May numbers are expected to see this number drop back to 9.9m, still an eye wateringly higher number, and well above the levels we saw pre-pandemic.     Weekly jobless claims also appear to have hit a short-term peak sliding back from 265k to 239k last week and are expected to edge higher to 245k. While weekly claims have been rising in recent weeks continuing claims have been falling, slipping to a 3-month low last week of 1,742k.     Today's ADP payrolls report is expected to see another solid number of 225k, down slightly from 278k.     While the number of job vacancies available remains at current levels it's hard to imagine a scenario where we might see a weak jobs report in the coming months, which means that its unlikely to be the labour market that prompts the Fed to signal a pause in the near term.     Services inflation has been the one area which the Fed has expressed concern that it might be stickier than it needs to be.     Today's ISM services report is expected to see headline activity edge higher to 51.3, while a close eye will be kept on prices paid which slowed to 56.2 in May, and a 3-year low.        EUR/USD – looks set for a test of support around the 1.0830/40 area and 50-day SMA, with resistance remaining at the 1.1000 area. A break below the lows last week opens the way for a potential move towards 1.0780.   GBP/USD – still in a tight range with support above the 50-day SMA at 1.2540, as well as trend line support from the March lows, bias remains higher for a move back to the 1.3000 area. Currently have resistance at 1.2770.     EUR/GBP – looks set to retarget the 0.8515/20 area and June lows, while below resistance at the 0.8570/80 area. Below 0.8510 targets the 0.8480 area. We also have resistance remaining at the 50-day SMA which is now at 0.8655. Behind that we have 0.8720.   USD/JPY – looks set for a test of the 143.80 area, while below the key resistance at 145.20. A break below 143.80 targets a move back to the 142.50 area. Above 145.20 opens up 147.50.    FTSE100 is expected to open 30 points lower at 7,412   DAX is expected to open 84 points lower at 15,853   CAC40 is expected to open 50 points lower at 7,260

Oil continues higher despite setbacks this week Could we finally be about to see a breakout in oil prices after two months of consolidation? The rally over the last week or so from the range lows has been quite strong and backed by momentum – as well as fresh cuts from Saudi Arabia and Russia – and despite being pushed back from the recent highs over the last couple of days, it’s continued to drive higher in a way that could see the upper boundary buckle. Yesterday’s ADP number appeared to wipe out any momentum that had built up but a rally late in the day saw it end the session in the green and come within a whisker of 21 June peak. A failure to overcome that could further confirm the continuation of the gradual consolidation we’ve seen over the last couple of months, whereas a break above could be a very bullish signal.   Can gold hold onto $1,900 after the US jobs report? Gold came under pressure in the aftermath of yesterday’s ADP report but managed to hold above $1,900 and even recoup some of its losses. It’s trading marginally higher today but whether it will be able to hold onto those gains, and remain above $1,900, will probably depend on what kind of jobs report we get. Can it cling on if we get another red-hot report? Another strong report is looking increasingly likely on the back of yesterday’s ADP number, although as we’ve seen in the past it isn’t always that reliable a barometer. A cooler report could propel it higher given expectations have now undoubtedly risen. It’s still almost 8% from its highs and a cooler report could offer the opportunity for a corrective move which we’ve barely seen so far.  

CEE: First sign of recovery The beginning of the week showed that a good mood is returning to the region. However, CEE FX is still not settled and we expect higher volatility in the days ahead. The local calendar is empty today and again the focus will be on the global story. We see the Hungarian forint as the main indicator of recovery in the region, having lost around 5% last week. Yesterday, on the other hand, it showed a 1% appreciation, the biggest daily appreciation since April, and returned to 380 EUR/HUF, which we believe may be a trigger for further inflows. Thus, a move below 380 EUR/HUF will be on the table today and we expect gains for the rest of the region as well if the global story permits. The Polish zloty posted some gains yesterday too and still has room to make up for last week's losses. We see the next level at 4.430 EUR/PLN.

British pound extends losses UK manufacturing and services PMIs decline in July The British pound continues to lose ground. In the North American session, GBP/USD is trading at 1.2822, down 0.23%. The pound has been on a nasty slide, losing over 300 points since July 14th.   UK manufacturing and services PMIs ease in July The week started on a sour note, as the UK manufacturing and services PMIs both slowed in July. Manufacturing fell to 45.0, below the June reading of 46.5 and the consensus estimate of 46.1 points. The manufacturing sector has now declined for 12 straight months and today’s release marked the PMI’s lowest level this year. Services slipped to 51.5, down from 53.7 and shy of the consensus of 52.4 points. This marked a 6-month low and pointed to weaker growth in business activity, which has been a key driver of the economy. It’s a very light data calendar in the UK, with no other tier-1 releases this week. Still, it could be a busy week for GBP/USD, with the Federal Reserve decision on Wednesday and US GDP on Thursday.   Fed expected to hike on Wednesday The Federal Reserve meets on Wednesday and the money markets have priced in a 0.25% hike as a near certainty and are heavily leaning towards a pause in September. This stance may be out of sync with the Fed, as Jerome Powell and other members have voiced concern that inflation isn’t falling fast enough and that could be a hint at further rate hikes after July. With the economy performing well and the labour market remaining tight, an argument can be made that the Fed has a golden opportunity to keep tightening in order to push inflation back to the 2% target. There have been concerns about whether the Fed can guide the economy to a soft landing, but the economic data is looking good and the chances of a major recession are low.   GBP/USD Technical GBP/USD tested resistance at 1.2858 earlier. Next, there is resistance at 1.2932  There is support at 1.2757 and 1.2637  

RBA says decision to pause was close call Australia to release confidence data on Tuesday US employment report a mixed bag The Australian dollar is coming off another rough week, with losses of 1.17%. The currency has looked dreadful, losing close to 300 points since July 17th. In Monday’s European session, AUD/USD is trading at  0.6556, down 0.20%. RBA in ‘wait and see’ mode The week wrapped up with the Reserve Bank of Australia’s quarterly policy statement, which didn’t reveal anything dramatic. The RBA paused rates for a second straight time last week and the statement indicated that the central bank is in a ‘wait and see’ mode with its rate policy. The RBA’s view is that inflation risks remain “broadly balanced” as it strives to guide the economy to a soft landing after an aggressive tightening campaign. The statement noted that the RBA has been divided on its rate path, saying that at the July and August meetings, the board considered raising rates. In the end, those members in favour of a pause won the day at both meetings, a signal that inflation is falling down fast enough for most members. The statement maintained the RBA’s forecast that inflation will drop to 4.1% by the end of the year and to 2% by the end of 2025, with core inflation dropping to 2.9% by mid-2025. We’ll get a look at Australian confidence data on Tuesday, with the markets braced for soft readings. Westpac Consumer Confidence is expected to dip to 80.7 in August, down from 81.3 in July. The NAB Business Confidence index is projected to decline to -3 in July, following the zero reading in June.   US employment report a mixed bag The July employment report was a mix. Nonfarm payrolls were soft at 187,000, despite a banner ADP release which fuelled expectations of a breakout nonfarm payrolls release. Job growth is slowing, but the unemployment rate ticked lower to 3.5% down from 3.6%, and wage growth stayed steady at 4.4%. The money markets are expecting the Federal Reserve to take a pause at the September meeting, with a probability of 84%, according to the FedWatch. It’s entirely possible that the Fed is done with tightening, but that will depend to a large extent on upcoming inflation and employment data. . AUD/USD Technical There is resistance at 0.6607 and 0.6700 0.6475 and 0.6382 are providing support  

CZK: Koruna is only one in the region to resist global influences The Czech koruna is the only currency in the CEE region that has surprisingly resisted losses. The widely expected depreciation after the end of the Czech National Bank's intervention regime two weeks ago did not come and, moreover, the strong US dollar does not seem to be weighing on the koruna. The balance sheet data also refutes any suspicions that the central bank would be active in the market again and prevent the CZK from weakening. IRS rates are following US rates in a rapid pace upwards, which was probably helped by the very stretched dovish expectations earlier. Plus, it appears the CNB hawkish story may have one more mini episode thanks to the spike in fuel prices following the August excise tax hike. This, by our calculations, could lead headline inflation above the CNB's forecast, whereas so far inflation has basically only surprised to the downside in recent months. Thus, the market may later find the current upward correction in rates to be justified. But it is too early to tell. For now, however, the interest rate differential in the Czech Republic seems to be the only one on a significant upswing, supporting FX. Based purely on yesterday's rate move, our model indicates that this could be enough for the koruna to move below 24.0 EUR/CZK for the first time since the last CNB meeting. Of course, the Czech Republic is not in a vacuum and a stronger US dollar or higher gas prices could also have an impact here, but for now it seems to be an island of safety in the region.

CZK: Koruna is only one in the region to resist global influences The Czech koruna is the only currency in the CEE region that has surprisingly resisted losses. The widely expected depreciation after the end of the Czech National Bank's intervention regime two weeks ago did not come and, moreover, the strong US dollar does not seem to be weighing on the koruna. The balance sheet data also refutes any suspicions that the central bank would be active in the market again and prevent the CZK from weakening. IRS rates are following US rates in a rapid pace upwards, which was probably helped by the very stretched dovish expectations earlier. Plus, it appears the CNB hawkish story may have one more mini episode thanks to the spike in fuel prices following the August excise tax hike. This, by our calculations, could lead headline inflation above the CNB's forecast, whereas so far inflation has basically only surprised to the downside in recent months. Thus, the market may later find the current upward correction in rates to be justified. But it is too early to tell. For now, however, the interest rate differential in the Czech Republic seems to be the only one on a significant upswing, supporting FX. Based purely on yesterday's rate move, our model indicates that this could be enough for the koruna to move below 24.0 EUR/CZK for the first time since the last CNB meeting. Of course, the Czech Republic is not in a vacuum and a stronger US dollar or higher gas prices could also have an impact here, but for now it seems to be an island of safety in the region.

06:10BST Monday 21st August 2023 China cuts key loan rate by less than expected  By Michael Hewson (Chief Market Analyst at CMC Markets UK)     The last 3 weeks haven't been good ones for markets in Europe, with the FTSE100 bearing the brunt of recent weakness posting its worst daily run of losses since October last year, as well as revisiting its March lows last week. The DAX has fared little better, revisiting the lows in July, as weakness in Asia markets, and China especially, pushed the Hang Seng down 5.89% and into bear market territory, as concerns over China's economy, the solvency of its real estate sector, and any risks of contagion into its financial system.   These concerns were amplified last week after Chinese asset manager Zhonghzi missed a coupon payment, as investors increasingly looked towards possible measures from Chinese authorities to support the economy and their financial system. Thus far we've seen little significant indication of support apart from some modest rate cuts or stimulus at a time when the economy is teetering in deflation, as well as a distinct lack of domestic demand.   This morning China did announce that they were cutting their one-year lending rate by 10bps to 3.45%, however they left their 5-year loan rate unchanged at 4.20%, having cut the medium-term loan rate last week. Unsurprisingly markets were less than impressed by this move, expecting authorities to be much more forceful. This lack of urgency has weighed on Asia markets and is unlikely to spark demand in an economy where loan demand appears to be low anyway. In the UK, the latest Rightmove House price survey saw asking prices cut by 1.9% in August the biggest decline this year as higher mortgage rates weighed on demand for houses. The prospect of another rate hike next month is also likely to be affecting confidence, although the fact we are in August, and in the middle of the school holidays probably also has a part to play.   US markets, which until recently had proved to be much more resilient have also succumbed to the recent weakness in equity markets, also sliding for the third week in succession, with both the S&P500 and Nasdaq 100 breaking below their respective 50-day SMA's in a sign that further losses could be on the way.   The weakness in US markets is altogether being driven by a different concern, namely that of higher interest rates for longer as the US economy, which continues to defy expectations of an economic slowdown, sees Fed policymakers push the prospect of more rate hikes in the coming months, pushing up long term yields to multiyear highs in the process, as the prospect of rate cuts gets pushed even further into the future. With that the main investors focus has become less on how high rates might go, and more on how long they will stay there.     This week is likely to see investor attention on the Jackson Hole Symposium where the topic up for discussion is "Structural Shifts in the Global Economy" This will be closely scrutinised for evidence that we might see a rate pause next month when the Federal Reserve next meets to decide on monetary policy.       When Powell spoke last year, he made it plain that there was more pain ahead for US households and that this wouldn't deter the central bank in acting to bring down inflation, even if it meant pushing unemployment up. His tone this week is unlikely to be anywhere near as hawkish, although he will also be reluctant to declare inflation victory either. It is clear that the Fed believes the fight against inflation is far from over, and in that context it's unlikely he will deliver any dovish surprises       EUR/USD – still looking soft with the main support area at the 1.0830 area. Still feels range bound with resistance at the 1.1030 area. Below 1.0830 targets the 200-day SMA.     GBP/USD – while above the twin support areas at 1.2610/20 bias remains for a move through the 1.2800 area, and on towards 1.3000. A break below 1.2600 targets 1.2400.        EUR/GBP – finding support for now at the 0.8520/30 area. A move below 0.8500 could see 0.8480. Above the 100-day SMA at 0.8580 targets the 0.8720 area.     USD/JPY – continues to edge higher, towards the 147.50 area. Below the 144.80 area, targets a move back to the 143.10 area.       FTSE100 is expected to open 10 points higher at 7,272     DAX is expected to open 15 points higher at 15,589     CAC40 is expected to open 10 points higher at 7,174  

Bitcoin fell to a two-month low as $1billion of losses occurred over past 24 hours Elon Musk’s SpaceX reportedly sold all its Bitcoin, after writing down holdings in 2021 and 2022 Bitcoin under pressure as global risk aversion leads to de-risking moment Bitcoin’s plunge stemmed from nervousness about the looming US Bitcoin ETF decisions and on concerns that China’s property crisis could lead to further downward pressure for risky assets.  Now that Bitcoin fell below the key trading range of $28,500 to $30,500, all eyes will be on the $25,000 level.     Bitcoin ETF rulings will start to happen and some traders are nervous that might not go so well.  Grayscale might get a ruling next week, but expectations are for more rulings to happen in September.  The bullish case for Bitcoin is that positive developments with an US Bitcoin ETF breakthrough could help prices make a run back towards the $30,000 region.  Bitcoin’s current downtrend however could get uglier if some of these rulings suggest a US ETF still remains distant or if the bond market selloff continues.     Bitcoin is once again acting like a risky asset and next week should be critical for Bitcoin.  If monetary conditions continue to crush risky assets, Bitcoin selling could target the $21,500 region.    

05:40BST Wednesday 23rd August 2023 Flash PMIs set to weaken further in August   By Michael Hewson (Chief Market Analyst at CMC Markets UK)     The FTSE100 managed to finally break its worst run of losses since 2019 yesterday, posting its first daily gain since the 10th August. The gains were hard-won however with the index trying retreating from its daily highs and failing for the second day in a row to consolidate a move above 7,300. The rest of Europe managed to do slightly better, outperforming and closing higher for the 2nd day in a row, although still closing well off the highs of the day.       US markets on the other hand after starting strongly slipped back after European markets had closed, sliding back on comments from Richmond Fed President Thomas Barkin who said the Fed needed to be open to the prospect the US economy might re-accelerate which might mean the central bank might need to hike rates further and keep them higher for longer, pushing the US dollar to its highs for the day in the process. Despite the weaker finish for US markets, the resilience in Asia markets looks set to see European markets open slightly higher later this morning.  The last set of flash PMIs saw German manufacturing slide to its lowest levels since the Covid lockdowns at 38.8 in further signs that the engine of the German economy continues to stutter. Weak demand in its key export markets as well as domestically, along with higher energy prices weighing on economic activity.       The only bright spot was services which came in at 52.3, but even here economic activity was slower, and both sectors are expected to weaken further in August further complication the task of the ECB which is expected to signal a pause in its rate hiking cycle next month. Manufacturing activity is expected to soften further to 38.6, while services is expected to slip to 51.5. Economic activity in France was also disappointing in July, although the underperformance was more evenly distributed with both manufacturing and services both in contraction heading into Q3. Manufacturing slipped to 45.1 in July and services dropped to 47.1. With energy prices rising sharply over the last few weeks, it's hard to imagine a scenario that will see a significant improvement given the weakness seen in China and other overseas markets. Manufacturing is forecast to come in at 45, and services at 47.5.     While economic activity has been slowing in Europe, the UK has also seen similar slowdowns in both manufacturing and services, although the composite PMI is just about hanging on in expansion territory, unlike its peers across the Channel.     Construction has been a notable strong point, however the focus today is on manufacturing which slowed to 45.3 in July, while services slowed from 53.7 in June to 51.5 in July. The recent GDP numbers for June showed a strong performance, however Q3 is likely to be much more challenging, with higher oil and gas prices likely to filter through at the petrol pump. UK manufacturing is expected to slow to 45, and services to 51.     US manufacturing and services look set to be more resilient at 49 and 52 respectively.      EUR/USD – continues to find support just above the 1.0830 area. Below 1.0830 targets the 200-day SMA at 1.0790 and trend line support from the March lows at 1.0750. Still feels range bound with resistance at the 1.1030 area.     GBP/USD – failing at the 50-day SMA again and the 1.2800 area. We need to see a move through the 1.2800 area, to signal potential towards 1.3000. A break below 1.2600 targets 1.2400.           EUR/GBP – sinking towards support at the 0.8520/30 area. A move below 0.8500 could see 0.8480. Above the 100-day SMA at 0.8580 targets the 0.8720 area.     USD/JPY – failed to push above the 146.50 area yesterday,but while above the 144.80 area bias remains for a move towards 147.50. Below the 144.80 area, targets a move back to the 143.10 area.     FTSE100 is expected to open 10 points higher at 7,280     DAX is expected to open 42 points higher at 15,747     CAC40 is expected to open 14 points higher at 7,255

easyJet narrows Q1 losses, and maintains full year guidance   The welcome return of the dividend back in November when easyJet reported its full year numbers appears to have been the catalyst for some solid share price gains with the shares retesting their 2023 highs earlier this month, having fallen to 10-month lows back in October. While this is welcome it's hard to ignore the fact that the easyJet share price has struggled to get anywhere near the highs we saw in 2021 which then saw a decline to ten-year lows in 2022. In fact, the current rebound still has us well below the 2022 peaks in a sign that while the recovery in the share price is welcome the shares have lagged well behind the likes of Ryanair whose shares have recovered all their post pandemic declines and managed to post new record highs at the end of last year.  With the shares over 50% below their pre-pandemic peaks and the fact that easyJet returned to profit last year due to a decent performance in H2 there is certainly scope for further share price gains if the progress made last year is carried over into 2024. Today's Q1 trading update has seen easyJet report a headline loss before tax of £126m which is a modest improvement on the £133m loss a year ago. The number of passengers saw an increase of 14% over the period with revenue per seat rising 3%. Total revenue saw a 22% increase to £1.8bn with strong growth in ancillaries of 20%, while holidays revenue jumped 95% to £181m, although total costs per seat rose by 2% to £77.2m    easyJet holidays has been the standout performer here managing to more than double its profits to £30m from £13m. While this is welcome the improvement here serves to mask a bigger loss in the rest of the business. In its defence the airline can argue that the conflict in the Middle East hasn't helped given that bookings in the region have fallen off, along with the various flight suspensions, which has meant that revenues here have declined even if costs haven't. Like last year easyJet appears to be banking on a similar strong H2 to offset the impact of a loss-making H1 with the number of seats expected to grow sharply from 42m in H1 to 59m seats in H2 Early indications suggest that the airline is on course to do this saying it expects its H1 loss to improve, despite the £40m impact caused by disruption due to tensions in the Middle East. It is clear from today's numbers that were it not for the easyJet holidays business which is going from strength to strength that it might struggle to match the profitability we saw last year when the airline returned a total profit after tax of £324m.  easyJet maintained its guidance of 35% growth in its holidays business in 2024 which would take its UK market share to 7%. This has helped to push the shares to their highest levels since June 2022 in early trade.  Also, on a brighter note revenue per seat for the second half of 2024 is currently ahead of last year's levels, which means that while the airline is heading in the right direction albeit with a bit of turbulence, it still has some way to go to match the performance in Ryanair, which is way ahead in terms of revenues and profitability.  By Michael Hewson (Chief Market Analyst at CMC Markets UK)