Daily Update - 10th September 2017
On Monday, there are no major events or indicators on the economic calendar except from Canada Housing Starts released by the Canadian Mortgage and Housing Corporation captures how many new single-family homes or buildings were constructed. It shows the strength of the Canadian housing market, which can be considered as the economy as a whole due to Housing Starts' sensitivity to changes in the business cycle. A bit starts ahead of the week for UK as they release their Consumer and Producer Price Index data for August with no forecast available yet, we believe that both the headline and the core rates may have rebounded somewhat. Our view is based on the nation’s services PMI, which showed that firms increased their average prices charged in August at the highest rate since April. The recent depreciation of the pound against the euro supports further the case for accelerating inflation. Even though a rebound in the CPI rates could revive some speculation with regards to a BoE rate hike this year, we remain skeptical on that prospect. A day with reports coming from UK, Europe and US will continue affect the financial market. It will begin with the UK employment report for July. It is a leading indicator for the UK Economy. Claimant Change will present the number of unemployed people in the UK. There is a tendency to influence the GBP volatility. This will be followed by Industrial Production that shows the volume of production of Industries such as factories and manufacturing. Up trend is regarded as inflationary which may anticipate interest rates to rise. In US, Producer Price Index will be released that measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation. The day will end with Monthly Budget Statement released by the Financial Management Service summarizes the financial activities of federal entities, disbursing officers, and Federal Reserve banks. A positive budget statement that receipts exceed budgetary outlays is seen as bullish for the USD It will be a big day on Thursday, Beforehand, Australia will release its Unemployment Rate release by the Australian Bureau of Statistics is the number of unemployed workers divided by the total civilian labor force. If the rate hikes, indicates a lack of expansion within the Australian labor market. As a result, a rise leads to weaken the Australian economy. followed by Consumer Price Index. The main event will be the Bank of England policy decision. The consensus is for the Bank to keep its policy unchanged via a 6-2 vote. At its latest meeting, when alongside the rate decision and the meeting minutes, the BoE published its quarterly Inflation Report, the Bank reiterated that policy may need to be tightened to a somewhat greater extent over the next 3 years than what was implied by market pricing at the time. Nevertheless, it signaled little urgency for a hike in the next months, while it revised lower its inflation and economic growth forecasts. In the US, we get CPI data for August. Given the increasingly concerned remarks on Wednesday by Brainard and Kashkari over inflation and interest rates, this set of CPI data is likely to attract more attention than usual, as it could prove critical on whether the FOMC will indeed proceed with another rate hike this year. Finally, on Friday, we get EUR Trade is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the EUR. In US, retail sales for August are due out to be released as well which measures the total receipts of retail stores. Monthly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending.Monday
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