15 August, 2017
North Korea’s 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. President Trump did not respond to this latest comment but Defense Secretary Mattis warned that the US Military is ready to intercept any missiles fired by North Korea. This latest “war of words” relieved market concerns with a move away from safe havens and a degree of risk-on sentiment. To add to USD demand was the recent comments made by New York Federal Reserve President Dudley who, on Monday, suggested that if economic data holds up then it was not unreasonable to think that the FOMC would begin trimming its $4.2 trillion balance sheet next month and hiking interest rates by the years’ end. In the early hours of Tuesday morning the minutes from the last Reserve bank of Australia policy meeting put the focus back on household debt. The RBA, in keeping to its monetary policy, commented for the “need to balance the risks associated with high household debt in a low-inflation environment”.
EURUSD gave up recent gains as USD demand increased. Overnight EURUSD has traded as low as 1.1768 and currently trades around 1.1780.
USDJPY has gained over 0.7% overnight, reaching a current high of 110.42, as demand for safe haven JPY has diminished. Currently USDJPY is trading at the daily high.
GBPUSD is generally flat from last nights close. Currently GBPUSD is trading around 1.2965.
Gold declined 0.5% overnight, following comments from Kim Jong Un, to trade as low as $1,272.97. Currently Gold is trading around $1,275.
WTI fell on Monday as fears of falling oil demand in China overshadowed news that Libya’s crude supply was disrupted. WTI added 0.2% overnight to currently trade around $47.75pb.
A plethora of US economic data will help give some indication as to whether H2 GDP will outperform H1. July retail sales are expected to rise from June, while housing starts and industrial production may be muted.
At 09:30 BST UK National Statistics will release Consumer Price Index (YoY) for July. Market consensus is calling for 2.7% from the previous reading of 2.6%. Inflationary pressure will add more credibility to a Bank of England rate hike later this year.
At 13:30 BST US Census Bureau will release Retail Sales (MoM) for July. Consensus is calling for a robust increase to 0.4% from the previous poor reading of -0.2%. An increase will help the FOMC adhere to their plans to have one more rate hike this year.
The ECB dominated markets yesterday as they shifted their policy stance and signalled their exit from QE. The Bank is looking to reduce its bond buying by...
The FOMC raised rates by 0.25 bps yesterday evening to a 1.75% to 2.00% target range in a hawkish move and reaffirmed its expected forecast of 2 more...
US President Trump and North Korean Leader Kin Jong Un met in Singapore overnight. Progress was made between the two leaders during this first meeting...
Britain's statistics continue to indicate a slowdown in the UK economy. Today's data showed a decline in industrial production by 0.8% during April against...
Yesterday's trading session saw a rotation from the NASDAQ and Tech into the Dow Jones and Industrials. The European Indices have under preformed this week...
Yesterday's session was quite after a pickup in volatility last week and there has been little in the way of movement overnight. This is despite some negative...
On Thursday the markets failed to develop growth momentum. Investors favoured a cautious tone towards riskier assets as the US imposed import tariffs on Canada...
Reports suggesting that Italy has a chance to avoid new elections had a positive impact on world markets. European and American markets retraced the previous...
The political concerns in Italy are spreading across markets causing serious pressure on the banking sector. Global equities have lost about 1.5% in the past 24 hours...