MORNING ROLL CALL
U.S. dollar rises versus peers, euro falls as ECB expected to keep interest rate at zero, when decision is revealed on Thursday
Generally positive domestic data helped USA indices rise on Wednesday, with the NASDAQ index printing a new record high, as tech stocks were back in favour. Housing starts in the USA rose by 8.3% in the month of June, with housing permits rising by 7.4%, permits were up from a shock -4.9% drop in May. According to the department of energy, stockpiles of oil and gasoline reduced by more than predicted, causing WTI oil to rise. The DJIA was up 0.23%, SPX up 0.45% and the NASDAQ up 0.64%.
WTI rose to a high of $47.29 per barrel, closing the day out at circa $47.29, significantly above R1. Gold gave up some of its recent ‘safe haven’ gains, ending the day at approx. $1241 per ounce, down circa 0.1%. EUR/USD declined by circa 0.3% to $1.1518, the biggest fall in a week; investors have their focus fixed on the ECB’s rate setting decision revealed tomorrow, the consensus is for no change, on the current zero rate. GBP/USD slipped by 0.1% to $1.3021. USD/JPY fell by circa 0.3% to 111.83, recovering from the daily low of 111.55, sited at S1.
In Europe the only significant economic calendar news data came in the form of construction output, which unexpectedly fell to 2.6% YoY, from 3.3% in May. In terms of relevant UK economic news, there were no medium to high impact news events to report, in a relatively quiet news day, as the UK’s parliament closed for the summer recess.
However, the Swiss investment bank Credit Suisse, reported that the risk of the UK entering recession later in 2017, has significantly increased. Credit Suisse sent a shiver through the City of London in the afternoon, warning that Britain is now ‘flirting with recession’. In a research note released on Wednesday, Credit Suisse suggested that there is a “roughly 30% chance” that Britain’s economy will fall into recession later this year, as the economy continues to slow. The U.K. recorded only 0.2% growth according to the latest official GDP figure.
European equities enjoyed a positive day on Wednesday, clawing back recent sharp losses; France’s CAC closing up 0.83%, Germany’s DAX up 0.17%, STOXX 50 up 0.62% and the UK’s FTSE up 0.55%.
Economic calendar events for July 20th, all times quoted are London GMT time
08:30, currency impacted GBP. Retail Sales (YoY) (JUN). Retail sales are predicted to rise to 2.5%, from the 0.6% figure registered in May.
11:45, currency impacted EUR. European Central Bank Rate Decision (JUL 20). There is little expectation for the rate to be adjusted, from the current rate of 0.00%.
12:30, currency impacted USD. Initial Jobless Claims (JUL 15). The jobless rate is expected to fall to 245k, from the 247k recorded in the previous week.
13:30, currency impacted EUR. ECB President Mario Draghi Holds Press Conference. After the rate decision is released, focus will then turn to the press conference, in order to discuss the decision.
14:00, currency impacted EUR. Euro-Zone Consumer Confidence (JUL A). Confidence is forecast to improve to -1.2, from the -1.3 reading in June.
14:00, currency impacted USD. Leading Indicators (JUN). The expectation is for a rise to 0.4%, from the 0.3% reading recorded in May.
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