Daily Update - 16th August 2017
Reports that came out yesterday firstly with GDP from Germany, the figure, which has been released, came in at 0.6%, a inch below markets’ expectations at 0.7%. It is the 12th quarter that Germany is printing positive economic growth followed by RBA’s latest minutes offered little to excite investors and did little to inspire any upward AUD momentum instead leaving the currency at the mercy of offshore stimuli. UK July inflation data came in softer than expected, the data remain within BoE projections, CPI is running above the BoE’s 2.0% target, but this is something the central bank is looking through, noting it as a temporary phenomenon. The news that broke the back of the pound and helped the dollar to recover further was the retail sales data from the US. This was the most important piece of economic data from the US apart from the NFP and the CPI data and this came in at a stronger than expected value of 0.6% and this helped the dollar bulls to brush aside the disappointment of the bad CPI data and led to a bout of buying of the dollar which helped it to recover across the board and push the pound down even further. Day starts with reports coming from UK, employment data for June will attract attention. The forecast is for the unemployment rate to have remained unchanged, while wages are anticipated to have risen at the same pace as previously. The Pound is therefore subject to further volatility. This will be followed by GDP Q2, Later in the evening, Minutes from July’s FOMC policy meeting will be in focus thereafter. The US Dollar may rise if the document suggests that the rate-setting committee stands by June’s projection for three rate hikes in 2017 – two of which have already materialized – despite a run of sluggish inflation figures recently.Yesterday’s Focus
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