Weekly Review and Outlook 5th September 2016

Mark NugentSept 2016, Trading Plan


Weekly Review for Week Commencing 29th August 2016

Last week saw a quiet economic calendar, with little Central Bank action and little news on any nation’s GDP, inflation or interest rates. However, Wednesday saw Canadian GDP beat expectations (0.6% vs 0.4%). Retail Sales in Australia disappointed (0.0% vs 0.3%). Thursday saw UK Manufacturing PMI beat expectations (53.3 vs 49.1) and US ISM Manufacturing PMI missed (49.4 vs 52.0). The week ended with the normal first Friday of the month in the US where Average Hourly Earnings missed (0.1% vs 0.2) and, critically, the famed NFP missed badly (151K vs 180K).

Equities showed a reasonable risk-on position. The USD index was flat with the CME Group forecasting the first rate hike in December. Oil was significantly down on the week. Emerging Markets currencies and equities floated down. 10 year bond yields were flat in Germany and moved slightly upwards in the UK and US. Noteworthy moves in currency indices included the GBP and JPY, the former rising from lows and the latter weakening.

Weekly Outlook for Week Commencing 5th September 2016

The G20 meeting in China over the weekend has seen Obama saying a trade deal with the UK is not a priority and PM Abe from Japan saying if the UK does not get the right deal then banks and car makers will leave. The Bank of Japan continues to say there is room for more accommodation in the run up to the next monetary policy meeting on 19/20th September.

It’s a busier calendar this week.

Monday – UK Services PMI.
Tuesday – Australian cash rate and statement; US ISM Non-Manufacturing PMI; NZ Global Dairy.
Wednesday – Australian GDP; UK Inflation Report Hearings; Canadaian Overnight Rate and Statement.
Thursday – Euro Minimum Bid Rate and Press Conference; US Crude Oil Inventories.

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