Reasons to be cheerful

25 July, 2016

The overall mood in markets at the start of the week appears to be pretty positive. Equities are again close to new highs in the US, whilst bond yields have backed up from the recent lows. The message appears to be that things aren’t as bad as perhaps everyone feared. This is also seen beyond the US, with broader share indices also at new highs for the year and bond yields moving tentatively up from the lows seen earlier this month. Despite this, the data in the run up to the Bank of England meeting early in August could change this as we start to get the first true readings of the health of the post-vote economy.

Both the US Fed and Bank of Japan meet this week. The Fed decision on Wednesday is all about the subtle shifts in the statement and whether there are any further signs of intended tightening later this year. The BoJ has more scope to bring volatility to markets, given the greater likelihood of some policy action either on rates or asset purchase programs. The market is positioned for some action on both as a means to boost the flagging Japanese economy. The yen has been weakening for most of the past two weeks, although a more consolidative tone has been seen over the past week. The BoJ’s ability to influence the yen for this year has been severely limited though, so it’s not necessarily the case that greater than expected policy action will weaken the currency on a sustained basis. For today, the data calendar is very much on the light side, so trading ranges are likely to be on the tight side ahead of the central bank meetings later this week.


Source link  
German & New Zealand Elections

The results of the German Election have re-elected Chancellor Angela Merkel for a fourth term. Her CDU party won fewer votes than was expected and Chancellor Merkel...

Fed Holds Rates for Now But...

Unsurprisingly, the Federal Reserve kept rates on hold following the end of its 2-day meeting on Wednesday. They did, however, indicate that...

UK Unemployment at 42 Year Low

UK unemployment fell to its lowest level since 1975, data on Wednesday revealed. Unemployment fell by 75K, bringing the unemployment...


US Equities at Record Levels

US equities closed at record levels on Wednesday, as improved risk-on sentiment returned to the markets and news that the US economy...

USD Stabilizes

Hurricane Irma has, reportedly, inflicted less damage on the US mainland than was originally predicted, thereby reducing the economic impact of the devastation it was expected to...

Markets on Edge

With the markets risk appetite dampened after North Korea’s most powerful nuclear test to date, USD and Global equities fell whilst Gold, Yen and Sovereign Bonds all rose....


Risk Appetite Returns

North Korea official news agency reported on Monday that leader Kim Jong Un will watch the actions of the United States for a while longer before making a decision to fire missiles at Guam...

US-Korean Tensions Rattle Markets

Markets were cautious on Wednesday, as safe-haven assets pushed higher after tensions grew between the US and North Korea. Markets are concerned...

Global Manufacturing Grows

Recent data releases have shown that global manufacturing saw an increase in July, further confirming global economic momentum has carried into H2...

  


Share: