Daily Market Update 17th October 2016
ECONOMIC DATA OF THE DAY
| Time | CY | Indicator | Forecast | Actual | Previous |
|---|---|---|---|---|---|
| 08:30 | SI | Non-oil Domestic Exports YoY | -5.80% | -- | 0.00% |
| 08:30 | SI | Non-oil Domestic Exports SA MoM | 1.80% | -- | -1.90% |
| 12:30 | JN | Industrial Production MoM | -- | -- | 1.50% |
| 12:30 | JN | Industrial Production YoY | -- | -- | 4.60% |
| 17:00 | EC | CPI YoY | 0.40% | -- | 0.40% |
| 17:00 | EC | CPI MoM | 0.40% | -- | 0.10% |
SPEECHES
- 17:45 – EUR – ECB board member Yves Mersch speaks in Luxembourg
- 22:45 – GBP – BOE deputy governor Ben Broadbent speaks in London
OVERNIGHT NEWS
CANADA:- China’s PPI unexpectedly rose in September for the first time in nearly 5 years (+0.1%, Exp. -0.3%) due to higher commodity prices. This rise should help the profits of the corporate and the necessary cash flow to pay back some of their debts. Corporate China sits on $18 Trillion in debt, representing around 169% of GDP. Prices of ferrous metals, non-ferrous metals and coal mining together rose 4.1 percent on-year, a key factor in the PPI turning positive, the statistics bureau said. The number of industries registering price increases also rose to 25, eight more than the previous month, indicating that a recovery in Chinese companies' pricing power was becoming more broad-based. (Reuters)
- CPI rose more than expected to 1.9% in September (Exp. 1.6%). Food prices were up 3.2 percent in September on-year, compared with 1.3 percent in August.
- Retail Sales rose as expected 0.6% MoM from -0.2%. Improved auto sales and increased gasoline prices drove the overall improvement. Spending at restaurants and bars leapt 0.8%, the largest one-month jump for the category since February. Sales at electronics and appliance stores dropped 0.9%
- Producer Prices rose more than expected to 0.3% MoM (Exp. 0.2%) and 0.7% YoY. Core prices increased 0.2% MoM (Exp: +0.1%). Food prices rose 0.5% driven by a 26% increase in egg prices and a 10.5% spike in vegetable costs. Energy prices jumped 2.5% including a 5.3% increase in gasoline and an 11.7% surge in jet fuel.
- University of Michigan Sentiment Index dropped to 87.9 from 91.2. The decline was concentrated among households earning less than $75,000 a year
FED
- Federal Reserve Chairwoman Janet Yellen said that in order to reverse “adverse supply-side effects” the central bank may need to temporarily run a "‘high-pressure economy’, with robust aggregate demand and a tight labor market.”
- She said: “we of course need to bear in mind that an accommodative monetary stance, if maintained too long, could have costs that exceed the benefits by increasing the risk of financial instability or undermining price stability.” However Yellen also noted that the relationship between a tighter labor market and inflation seems to have weakened in recent years. “The influence of labor-market conditions on inflation in recent years seems to be weaker than had been commonly thought prior to the financial crisis,”
- Yellen did not address interest rates or immediate policy concerns directly
FOREIGN EXCHANGE (INDICATIVE RATES)
| Currency | Last | % Change | Overnight Range |
|---|---|---|---|
| DXY | 98.12 | 0.52 | 97.51 - 98.12 |
| EURUSD | 1.0966 | -0.76 | 1.0971 - 1.1058 |
| USDJPY | 104.12 | 0.45 | 103.61 - 104.48 |
| AUDUSD | 0.7598 | 0.65 | 0.7556 - 0.7648 |
| GBPUSD | 1.2172 | -0.51 | 1.2169 - 1.2262 |
COMMODITIES (INDICATIVE RATES)
| Currency | Price USD | % Change | Overnight Range |
|---|---|---|---|
| Gold | 1251.03 | -0.56 | 1246.21 - 1259.52 |
| Silver | 17.42 | -0.41 | 17.31 - 17.59 |
| Oil (BRENT) | 51.95 | -0.54 | 210.45 - 213.20 |
| Oil (WTI) | 50.35 | -0.18 | 49.90 - 51.14 |
COMMODITIES
Precious Metals: GGold prices declined as investors weighed the likelihood of higher U.S. interest rates. Prices have not shown any direction since breaking below from $1,300 and seem to be seeking a support around $1,250. Similarly, silver prices are consolidating above its 200-DMA.
Oil: Both Brent and WTI futures settled lower on Friday, but finished higher for a fourth straight week. Data from Baker Hughes Friday revealed that the number of active U.S. rigs drilling for oil, climbed for a seventh straight week, by 4 to 432 rigs. On WTI charts, price strength is waning after testing resistance around $51.70. A break above the inverse head and shoulder formation, may offer more potential upside ahead.
FOREX NEWS
- U.S. stocks closed slightly higher on Friday, after a trio of bank quarterly earnings results topped analyst estimates and Yellen highlighted the benefits of a tight labour market. The S&P 500 index advanced 0.43 points to finish at 2,132.98, but a 1% decline on the week.
- HP Inc. fell 4.4% after it disclosed a cautious forecast that cash flow will come up short in 2017, along with plans to cut 3,000 to 4,000 employees.
- Salesforce.com Inc. shares jumped 5.2% following reports that the company has no more interest in buying Twitter Inc., whose Shares closed down 5.2%.
- European stocks closed higher on Friday, as bank shares rose and mining stocks hiked on upbeat inflation news from China. The Europe Stoxx 600 bounced up 1.3% to finish at 339.95 with Financial sector leading the way. The FTSE 100 shot up 0.5% to end at 7,013.55.
- Italian lender Banca Popolare dell’Emilia Romagna was up by 5.2%, after Reuters reported that it had sold a 618 million-euro portfolio of bad loans, and it will hold a shareholder vote this weekend on a proposed merger with Banca Popolare di Milano.
- Tesco PLC bounced up 4.4% after the supermarket chain resolved a pricing dispute with Unilever PLC. As an settlement, Tesco had pulled Unilever products such as Marmite spread and Ben & Jerry’s ice cream from its online store.
- Drill rig count climbs seventh week to highest since February
- Libyan crude output increases to 560,000 barrels a day: NOC
Oil extended declines after U.S. producers increased drilling as the market contends with an overhang of crude inventories at the highest seasonal level in at least three decades. Futures lost as much as 0.7 percent in New York after slipping 0.2 percent Friday. Rigs targeting crude rose for a seventh consecutive week to the highest level since February, Baker Hughes Inc. said on its website. Output from OPEC member Libya has expanded to 560,000 barrels a day, according to an official at National Oil Corp. This compares with a reported production rate of 540,000 a barrels a day last week.
Read the full article at bloomberg.com
