Daily Alert: Tuesday 6th September 2016

Mark Nugent Daily Alert, Sept 2016

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Forex Analysis for Tuesday 6th September 2016
Economic Calendar

UK Services PMI beat expectation (52.9 vs 49.1) and the GBP rose but ended the day only slightly up vs the USD. Early this morning, the Australian Cash Rate was held at 1.50% as expected. The statement revealed that recent data indicates that overall growth continues despite the recent fall in business investment. Further, the RBA commented that inflation is still quite low and is expected to remain low for quite some time.

Japanese PM Abe Adviser Hamada stated the BoJ should wait for the Fed before taking the next steps towards further easing as the BoJ risks having their efforts overshadowed if it expands easing in September and Fed maintains rates a few hours later. Hamada added that a Fed hike would have more impact on weakening the JPY than anything the BoJ does alone and that there is still an opportunity to expand easing in November and December. (Zerohedge).

The US markets were closed for Labour Day.

Market Reaction

Almost all equity markets started the day by gapping up with Hong Kong continuing up and all others moving down from the open. Oil moves up from the 100 MA line.

Forex Indexes

GBP reached the neckline of the double bottom pattern. A bounce down is the more likely forward path. The Euro loses all the gains made over the last 2 to 3 weeks. The JPY strengthens slightly on Hamada’s comments.

Media

Nothing of note – mostly the tail-end of G20 commentary.

Today

Later today we can expect US ISM Non-Manufacturing PMI, New Zealand Global Dairy Trade prices and early Wednesday morning sees Australian GDP.

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