Financial News September 16, 2015
UK sales probably hurt by bad weather
The underlying trend of consumer demand is strong, supported by a high level of consumer confidence and rapid growth in real disposable income.
However, retail sales are highly volatile on a month to month basis.
“In July, sales ex auto fuels rose by 0.4% mom but in August they will have been hurt by the unusually wet weather in the final week so a fall of 0.6% mom is predicted”, says Societe Generale.
Temporary recovery of oil prices was driven by speculation
The ICE and CFTC statistics show that the previous increase in oil prices was largely attributable to short covering.
Since mid-August, the number of speculative short positions in Brent on the ICE has fallen from around 130,000 contracts to 97,000 contracts as per 8 September, while those in WTI on the NYMEX have declined from 159,000 to 129,000 contracts.
Overall, however, investor optimism has decreased significantly as compared with May, based on net long positions in both oil types, notes Commerzbank.
Market Review September 16, 2015
Rumours for the upcoming FOMC rate hike give and take. Some traders are expecting a violent move and some others claim that the market has already priced in a small increase in the rates. Despite of this US and global equities recorded an increase and it resumes in the early session today. Traders will be turn their focus to the yields and bonds market as all the volatility will start from there. On Forex market the most pairs are trading in a range waiting for the actual release in order to get a new direction. Nonetheless the opinion that the currency market has priced in the hike is also present.
In UK traders are waiting for the economic releases in order to predictive the possible moves of BoE since it look that there is no solid evidence and necessity for a rate hike this year. Is clear that BoE and FED are highly depended on the upcoming data to structure their monetary policy.
On the data front so far we had New Zealand’s Current account came in at -1.22 billion and Australia’s MI Leading Index m/m released at -0.3%. Later Today we expect the UK data that will be the major event of the session. The Swiss ZEW Economic Expectations and Eurozone CPI data may have an impact to the market. In US session the US CPI data and the Canada Manufacturing Sales data will caused volatility.
Data releases to monitor:
GBP: Average Earnings Index 3m/y, Average Earnings Index 3m/y, Unemployment Rate, 10-y Bond Auction
CHF: ZEW Economic Expectations
EUR: Final CPI y/y, Final Core CPI y/y, German 30-y Bond Auction
USD: CPI m/m, Core CPI m/m
CAD: Manufacturing Sales m/m, Foreign Securities Purchases, NAHB Housing Market Index
[B]Trade Idea of the Day
GBP/JPY[/B]
Currently the pair is trading at 184.51. Traders must monitor the 187.31 resistance level and the support level of 181.80 for possible breakouts. A possible scenario would be a movement towards the 183.90 support level where a break may lead to the 183.10 area. An alternative scenario could be a movement towards the 185.20 resistance level, where a break may lead to the 186.00 area.