Daily Alert: Friday 9th September 2016

Mark NugentDaily Alert, Sept 2016

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Forex Analysis for Friday 9th September 2016
Economic Calendar

The ECB kept rates and QE the same. Draghi’s statement was relatively uneventful, with the highlight coming in the form of the staff projections:

CPI forecast – 2016: 0.2%, 2017: 1.2%, 2018: 1.6% vs. Prev. CPI forecast – 2016: 0.2%, 2017: 1.3%, 2018: 1.6%

GDP forecast – 2016: 1.7% , 2017: 1.6%, 2018: 1.6% vs. Prev. GDP forecast – 2016: 1.4%, 2017: 1.7%, 2018: 1.7%

As you can see there is very little change from the last forecast. As a consequence, ECB President Draghi states that no additional stimulus is needed at this time and that they are working on a smooth implementation of policies.

In the US, Crude Oil Inventories dropped by 14.5M barrels vs forecast of an increase of 0.6M barrels. This is due to lower than normal production and imports caused by a series of tropical storms on the East and Gulf Coasts.

Early today, Chinese CPI y/y missed (1.3% vs 1.7%).

North Korea tested what appears to be their biggest ever nuclear device.

Market Reaction

Most equities move sideways on little new. The Euro50 drops during Draghi’s press conference due to the absence of more stimulus but most of the loss is reversed before close. Oil jumps on the inventory number but the CAD barely blinks. Euro rises on the absence of new currency-weakening measures from the ECB. The GBP index continues to move down from resistance. AUD and NZD drop slightly.

Media

Nothing of note.

Today

Some Canadian employment data later.

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