The dollar rises to an 11-week high; indices fall around the globe

The US dollar

The USD continued to rally on Friday morning, having a negative effect on equity markets. On Thursday, US indices fell in excess of 1%. Nikkei suffered losses in the Asia Pacific (APAC) region. At the Federal Reserve's (Fed) banking symposium today in Jackson Hole, we hear from Christine Lagarde at noon, and then at 3 p.m. the keynote address from Fed Chairman Jerome Powell.

The UK Consumer Confidence Index

UK consumer confidence rose more than expected in August. The index recorded its biggest gains since April, as evidence suggests that the high cost of living is finally beginning to ease. The Growth From Knowledge Consumer Confidence Index (Gfk) is still negative, though, and the easing of the situation is all relative. Rising to -25, five points better than the previous month. Economists anticipated a gain of only one point to -29.

The British consumer price index

British consumers' mood perked up as lower inflation made individuals less downbeat. With the consumer price index now at 6.8%, wage growth is now close to matching inflation for the first time in nearly two years. Households' expectations for their personal financial situation over the coming year rose to -3 from -7. A year ago, when energy prices were soaring, this indicator was down to -31. Part of this is the rise in wages, which are climbing at their fastest rate on record in the most recent data.

German economy overview

In Germany, final estimates of gross domestic product in the second quarter stayed unchanged, at 0% quarter on quarter (QoQ) and -0.2% on an annualised basis. At 9 a.m., Ifo's business climate is forecast to decline for a fourth straight month to 86.7 from 87.3 in July.

Gap

Gap posted its quarterly report yesterday after the closing bell. The clothes retailer posted 34 cents per share in earnings in the second quarter, higher than the 10 cents expected. Net sales fell 8% to $3.55 billion, narrowly missing analysts' estimates of $3.58 billion. As the top and bottom lines show, Gap has also been battling declining sales and even warned it was losing market share to rivals like Shein, Amazon, and T.J. Maxx.

Gap and Banana Republic

The group had no choice but to close underperforming Gap and Banana Republic stores to save on costs. Gap had to part with 2,000 jobs to shield its margins. Gap warned that sales would continue to decline at a steeper rate in the current quarter and now sees fiscal 2023 net sales decreasing in the mid-single-digit percentage range.