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Market Review

The Japanese Cabinet Office said that Japan’s index of leading economic indicators rose to a seasonally adjusted 99.2, from 98.4 in the preceding month. China took aggressive steps today to fend off signs of growing risks in its financial and banking system, presenting detailed rules to tackle an unruly peer-to-peer (P2P) lending sector and intervening in its markets.

Euro area banks saw profits fall in the first three months of this year, as they made less money from trading and most other business areas, European Central Bank data showed on Wednesday. Germany’s gross domestic product (GDP) rose in the last quarter to a seasonally adjusted 0.4%, from 0.4% in the preceding quarter. The number of mortgages approved in the UK fell to a seasonally adjusted 37.7K, from 39.8K in the preceding month.

Hawkish comments by Fed vice chair Stanley Fischer, raised speculation that Fed Chair Yellen could reveal a more optimistic outlook, abandoning her generally dovish position and leaving hopes for a possible rate hike in September. The Mortgage Bankers Association said that the number of mortgage applications in the U.S. fell for the second week in a row to a seasonally adjusted 2.1% in the week ending August 19 to 530.1. That was after a drop of 4.0% to 541.5 in the preceding week.

Currencies: The dollar climbed higher against most major currencies on Wednesday, despite the release of weak U.S. home sales data and as sentiment on continued to strengthen ahead of Federal Reserve Chair Janet Yellen’s highly anticipated speech on Friday and a possible rate hike. The EURUSD traded lower between $1.1312 and $1.1245. The GBPUSD traded higher between $1.3161 and $1.3272. The USDJPY traded higher between ¥100.10 and ¥100.60.

Crude oil: Oil prices tumbled on Wednesday, after an unexpectedly large US inventory build in the world's biggest oil consumer, that renewed worries about oversupply. On the ICE future Exchange, North Sea Brent crude traded lower between $49.83 and $48.66 On the New York Mercantile Exchange, U.S. light crude oil traded lower between $47.71 and $46.43.

Gold: Gold prices were lower on Wednesday, breaking below the familiar trading range as market players looked ahead to the speech from Federal Reserve Chair Janet Yellen due on Friday. On the COMEX division of the New York Mercantile Exchange, gold traded lower in a broad range between $1339.86 and $1323.72 an ounce.

Indices:  Shares in Asia were mixed with Tokyo edging higher on a weaker yen and Shanghai taking a breather with investors awaiting comments at the end of the week from the Fed. At the close in Tokyo, the Nikkei 225 advanced 0.61%. At the close in China, the Hang Seng lost 0.77%.

European stocks added consecutive daily gains for the first time in three weeks, due to a weak euro and as investors weighed in a U.S. interest rate rise, that boosted the dollar. At the close in Frankfurt the DAX edged up 0.28%. At the close in Paris, the CAC40 gained 0.32%. At the close in Madrid, the IBEX 35 climbed 0.87%. Finally, at the close in London the FTSE100 declined 0.48%.

Wall Street was lower on Wednesday, driven by declines in technology and defensive stocks as investors weighed in the possibility of a rate hike in the near future. At the close, the Dow Jones industrial average lost 0.35%. The S&P 500 dropped 0.43% and the NASDAQ composite fell 0.81%.

Economic Calendar
Thursday 25th August 2016:

Time

Currency

Events

Forecast

Previous

 8:00

EUR

German Ifo Business Climate

108.5

108.3

12:30

USD

Core Durable Goods Orders m/m

0.40%

-0.40%

12:30 

USD

Unemployment Claims

265K

262K

12:30 

USD

Durable Goods Orders m/m

3.40%

-3.90%

All Day

ALL

Jackson Hole Symposium

 

 

23:30

JPY

Tokyo Core CPI y/y

-0.30%

-0.40%

Posted: 8/25/2016 7:21:32 AM by Global Administrator | with 0 comments


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