The US and global economies have actually gained a lot of ground since the 2008 financial crisis. But anyone who thinks we’re on a steady path to the promised land clearly hasn’t been paying attention. Global economic growth has actually slowed to a crawl, inflation is sinking and consumer confidence remains low. Commodity prices are in their worst crisis of a generation and central banks are easing monetary policy at an alarming rate. The United Kingdom just decided to leave the European Union (EU) in a vote that has actually changed the fundamental outlook on the pan-European project.
Today’s calendar attributes numerous vital United States data consisting of CPI Inflation as well as Consumer Self-confidence for September. Yesterday’s data from the US (Retail Sales) was weaker than expected which contributed to issues concerning the FED not raising prices this year whatsoever. Financial markets are now pricing a 10% chance of a price trek on September21st and also 50% for December. In addition, the BoE and also SNB both maintained their plans the same, however when it comes to the BoE, it left the door open up to more price cuts this year, something that placed stress on the GBP.
More popularly known as WD Gann for the development of technical analysis tools known as Gann Angles, William Delbert Gann created these market forecasting methods based on principles of geometry, ancient mathematics, astronomy, and astrology.
There are several market moving events in the calendar today, including 2 Central Bank Rate Decisions and US Retail Sales. Bank of England is widely expected to keep the rates unchanged along along with its stimulus package set at 435billion GBP. The Swiss National Bank is likewise expected to keep their policy unchanged at -0.75%. US Retail Sales will be closely watched in the afternoon. While US Rate expectations for September (next week) are rather low, the news today will confirm whatever the decision next week will be.
After years of massive economic stimulus, the Bank of Japan (BOJ) could become the first central bank to adopt “helicopter money” in an attempt to jolt the economy out of stagnation. This highly unconventional policy approach has drawn the ire of many in the market community. In this Q&A we explore why this might be the case.
After a relatively calm start to the week, volatility has actually returned to the market. Most action is seen in Stock markets, along with the global selloff sparking concerns. Yesterday was the 5th consecutive day of decline s in stock markets and the SP500 has actually touched a 2-month low.
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Last night Chinese data was rather strong as retail sales, industrial production and investments all rose above consensus. Additionally last night, FED member Brainard played down the chance of imminent rate hikes as her comments suggested that the Fed is not ready to hike in next week’s meeting. Her comments sparked volatility in a generally subdued session up until that time.
Currencies: There is still lack of direction In the markets as there hasn’t been any market moving data to give rise to speculation as to a rate hike on September 21st. Nevertheless, Thursday will feature the US Retail Sales report that is an important indicator of the health of the US economy, so volatility may be just around the corner. EUR/USD consolidated between 1.1225 and 1.1240, while GBP/USD traded 1.3315-40. USD/JPY was slightly more volatile, as it fell from 102.00 to 101.40 in the early part of the Asian session, however managed to bounce from there and rallied back to 102.
Here’s how the markets are responding
• Major global indices are taking a hit following the selloff of US stocks.
• In Asia, the Nikkei fell 1.5%, the Hang Seng dropped 2.5% and the Shanghai SSE is down 1.6%.
• US stocks dropped 2.5% on Friday – the biggest decline we’ve seen since the Brexit referendum.
European Central Bank (ECB) kept Eurozone’s interest rates at the same levels, but reiterated its readiness to react in the near future and called for national economies within the bloc to step up their efforts to assist growth.