Daily Alert: Wednesday 14th September 2016

Mark Nugent Daily Alert, Sept 2016

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Forex Analysis for Wednesday 14th September 2016
Economic Calendar

In the UK, CPI y/y missed (0.6% vs expectation of 0.7%), causing a significant drop in the GBP. Core CPI y/y missed by a similar margin (1.3% vs 1.4%). German ZEW Economic Sentiment missed (0.5 vs 2.8). BoJ are said to explore delving deeper into negative rates and plans to make this the centre of future monetary easing, according to reports in Nikkei. The report further added that the BoJ will also discuss reducing purchases of 25yr+ JGBs and the increase of shorter-term bond purchases due to declines in long-term yields. (Nikkei)

EU’s Juncker is said to warn EU it faces a battle to survive, an existential crisis in the EU between the western and eastern states. The eastern states tell him it is his fault and he is also to blame for Brexit. I love it how the new guys tell it like it is. (Telegraph)

Market Reaction

A general sell-off on equities and also on bonds as yields rise. There’s a slight skittishness to the markets prior to next week’s FOMC meeting. Oil moves below the 50MA line. In currencies, the USD and EUR are up on the week; JPY is flat; the GBP respects the resistance line and the commodity currencies are all down.

Media

Bloomberg report on the practice of S&P500 companies reporting flattering “adjusted” earnings rather than strict GAAP earnings. Another example of people involved with money gaming a system to their financial benefit. Surprised?

Today

The second big UK-related announcement of the week occurs at 0930 BST: Average Earnings 3m/y. US Crude Oil Inventories come out this afternoon and the evening sees New Zealand GDP.

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