Daily Alert: Wednesday 7th September 2016

Mark NugentDaily Alert, Sept 2016

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Forex Analysis for Wednesday 7th September 2016
Economic Calendar

US ISM Non-Manufacturing PMI missed (51.4 vs 55.4) causing the USD to slide. NZ Global Dairy was positive (7.7% vs no expectation). Early this morning we had Australian GDP q/q which was a minor miss (0.5% vs 0.6%) but seen as good enough in the current climate.

BoJ is said to be struggling on forming a consensus regarding its approaching policy review, according to Sankei (newspaper).

Oil news: WTI Crude futures extended on yesterday’s gains following further comments from OPEC producers which continued to suggest willingness to support prices and saw WTI advance back above the USD 45/bbl level. Saudi Arabia’s Foreign Minister stated that if other countries go along with an output freeze then they will support it, while he also added that there is a risk that Iran could spoil any agreement. (Newswires). The Iraqi PM stated that they support a freeze on production in order to increase prices. (Newswires)

Market Reaction

All equities flat or slightly down, except Hong Kong. Oil currently challenging the 50MA from the downside.

Forex Indices

AUD and NZD continue up on carry trade; GBP clings to “neck” of double bottom pattern; CAD holds onto resistance; JPY strengthens for third consecutive day; USD drops on poor ISM.

Media

Saudi Arabia struggling with its debt due to low oil price.
Swedish Krona funds the carry trade.
BoE’s Carney felt to be under pressure for acting too early post-Brexit vote.
ECB may see downside risk to forecasts due to Brexit.

Today

At 0930 BST we have UK Manufacturing Production followed this afternoon by Inflation Report Hearings with Carney and the politicians and then at 3pm BST we have Canadian Overnight Rate and Statement.

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