Leading Indicator Index (AUG)
The US leading indicator index fell more than expected during the month of August at a rate of -0.6 percent to 137.8, erasing most of the gains achieved in July. A breakdown of the index is not highly encouraging, as nearly every component declined. Consumer expectations took the biggest hit, followed closely by stock prices, building permits, and jobless claims - all of which are very vulnerable points at this time. Indeed, with oil prices rocketing to fresh highs above $81/bbl, volatility in the financial markets persisting, the housing recession worsening, and the labor market slowly softening, the outlook appears to be grim. These were some of the factors that led the Federal Reserve to cut rates on Tuesday, but given the price pressures looming in the pipeline (oil, food), their inflation concerns could be well warranted and puts the central bank in a very precarious position over the next few months.
The US Dollar has weakened further in the minutes following the release, pushing EURUSD to fresh record highs of 1.4061.