Market Blog > August 2016 > Market Review

Market Review

Japanese Prime Minister Shinzo Abe's cabinet approved 13.5 trillion yen in fiscal measures, even as the central bank fought market speculation that it is preparing to put the brakes on monetary stimulus. In a report, the Cabinet Office said that household confidence in Japan rose less-than-expected last month to a seasonally adjusted annual rate of 41.3, from 41.8 in the preceding month. China has an open attitude towards a free trade deal with Britain and is willing to study it, according to China's Commerce Ministry.

In a report, Eurostat said that Euro zone producer price inflation rose more-than-expected last month to a seasonally adjusted 0.7%, from 0.6% in the preceding month. U.K. construction sector activity slipped further into contraction in July and fell to a seasonally adjusted 45.9 from June’s reading of 46.0.

Fed member Kaplan, along with several other Fed policymakers, has called for caution in trying to raise rates again since the U.S. central bank raised its benchmark interest rate for the first time in almost a decade last December. U.S. consumer spending increased by a seasonally adjusted 0.4% last month, beating expectations for a 0.3% rise, and compared to a gain of 0.4% in May. July U.S. auto sales remained strong as consumers continued to spend on pickup trucks and SUVs but the two biggest manufacturers in the market failed to hit analysts' expectations.

Currencies: The dollar continued to suffer losses against the other major currencies on Tuesday, following news of additional stimulus measures in Japan and diminished expectations for a U.S. rate hike before the end of the year. The EURUSD traded higher between $1.1159 and $1.1233. The GBPUSD traded higher between $1.3172 and $1.3357. The USDJPY traded lower between ¥102.83 and ¥100.68.

Crude oil: Oil prices fell further on Tuesday, erasing early gains and forcing U.S. crude below $40 a barrel, as worries of a glut offset the impact of a weak dollar that initially propped the market. On the ICE future Exchange, North Sea Brent crude traded lower between $43.16 and $41.52. On the New York Mercantile Exchange, U.S. light crude oil traded lower between $40.88 and $39.27.

Gold: Gold soared on Tuesday, surging to test 28-month highs, as the dollar tumbled to its lowest level since late June and inflation remained relatively weak, potentially delaying the next move of the Federal Reserve for an interest rate hike. On the COMEX division of the New York Mercantile Exchange, gold traded higher in a broad range between $1346.54 and $1366.53 an ounce.

Indices: Asian shares remained weaker on Tuesday as investors turned cautious on Japan and its efforts on monetary and fiscal policies. At the close in Tokyo, the Nikkei 225 tumbled 1.47%. At the close in China, the Hang Seng remained flat with 0.00% change.

European stocks were lower on Tuesday, as disappointing manufacturing activity data from China and the U.S. continued to weigh on sentiment and as investors focused on a new batch of earnings reports. At the close in Frankfurt the DAX lost 1.80%. At the close in Paris, the CAC40 dropped 1.84%. At the close in Madrid, the IBEX 35 fell 2.77%. Finally, at the close in London the FTSE100 declined 0.73%.
Wall Street followed global stocks lower on Tuesday as Japan’s stimulus program disappointed and worries continued over European banks questionable stress tests. At the close, the Dow Jones industrial average lost 0.49%. The S&P 500 dropped 0.55% and the NASDAQ composite fell 0.90%.

Economic Calendar

Wednesday 3rd August 2016:
 

Time

Currency

Events

Forecast

Previous

01:45

CNY

Caixin Services PMI

52.9

52.7

08:30

GBP

Services PMI

47.4

47.4

12:15

USD

ADP Non-Farm Employment Change

171K

172K

14:00

USD

ISM Non-Manufacturing PMI

56

56.5

14:30

USD

Crude Oil Inventories

 

1.7M

Posted: 8/3/2016 5:39:05 AM by Global Administrator | with 0 comments


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