Daily Alert: Thursday 18th August 2016

Mark NugentAug 2016, Daily Alert

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Economic Calendar

Wednesday saw UK Average Earnings miss slightly at 2.4% (2.5% expected), but the unemployment Claimant Count Change was positive, dropping by 8.6K vs expectation of a 5.2K rise. The highlight was the FOMC minutes where the voters were split on the need for a September hike and were said to be data dependent, meaning they do not feel they have seen sufficient data at this time to merit a rise. The markets saw the minutes as dovish and the CME Group’s forecast of a rate hike moved out from December to either February or March 2017. This morning, there was positive news in Australia on employment, moving up by 26.2K vs expectation of 10.2K. BoJ advisor Honda said there was a 50% chance of bold action in September but there was no need to cut the deposit rate (i.e. the intervention, should it happen, would be around QE.)

Market Reaction

The Fed minutes caused the US stock markets to rise and the USD to fall, as expected. Global stock markets were mixed with a lot of sideways movement. Oil continued to rise. The Euro index maintains its steady rise.

Media

The Fed’s dovishness and its positive effect on Emerging Markets currencies and equities was reported as was cost cutting in the oil industry and ongoing Brexit negotiations requiring a “custom solution” according to German officials.

Forex Indexes

The GBP index hits a new low. The AUD slips down from resistance and the NZD moves sideways at resistance.

Today

Later today we have UK Retail Sales and in the US we have Philly Fed Manufacturing Index and Unemployment Claims.

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