Daily update
Markets continued to digest last Friday’s high tier data from the States yesterday. Retail sales and PPI (Producer Price Index) both under performed against market expectations. The retail sales figure showed no growth in July, whilst core retail sales plunged to -0.3%. Consumer spending is the main driver of the service led US economy and after the latest set of poor readings it suggests the chances of a Fed rate hike are beginning to fade this year. PPI declined to -0.4%, its biggest decline since September 2015, a figure which implies the inflation rate in the US will likely soften. In other news, oil climbed above $45 a barrel in New York for the first time in three weeks. The uptick is related to speculation that crude producers will revive discussions to stabilise the market. The gains follow on from crude’s best performance since April last week after the Saudi Arabian energy minister’s “verbal intervention”. The Saudi energy minister signaled willingness to discuss taking action at next month’s informal OPEC talks. After the Bank of England cut rates and implemented further QE this month, the inflation figure yoy is posted where it is due to remain constant at 0.5%. However due to the massive depreciation of the Pound following Brexit, we could see the figure above is due to imports becoming more expensive. From the Eurozone, the German ZEW economic sentiment is forecasted to post a positive 2.1 adding to a more positive outlook for the powerhouse of the single currency zone. Attention then turns to the US, where they post the monthly inflation figure with a 0.0% expected, down from 0.2% on the previous month.Yesterday's markets
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