INTEREST RISE ON THE BRINK
The issues that have plagued China and their stock market recently continue unabated. The stocks continue to slide and this is showing fresh lows almost daily, hitting these again yesterday. We have discussed the flight to safety of investors viewing the US currency as a haven against the unsettling impacts of this risk. However, yesterday the talk from the Federal Reserve dimmed the appeal of the Greenback.
The minutes from the Federal Reserve’s last meeting were balanced with ‘good’ and ‘bad’ revelations. On one hand, there seems to be an agreement between the members of the committee that the interest rate rise is imminent and so I imagine preparations and calculations are already under way to attempt to implement and gauge the economic reaction. On the other hand, there is talk of inflation not being where it needs to be and problems in the global economy leading to softer demand. The question is, does the latter push back the former?
The GBP enjoyed a very slight increase against the USD as the questions reigned regarding the timing of an interest rate rise. This was not quite the case against the Euro, where the Pound lost ground markedly during the course of the day.
Today’s data is to be the UK Retail Sales figures, widely forecast for an improvement in a number of measures. Then we have the UK Industrial Trends Survey. Next we have an array of US data including Initial Jobless Claims, Continuing Jobless Claims, Home sales surveys and a manufacturing survey as well. Though, as has been the case for the last few weeks, movements are certainly being set by more macroeconomic events at play.