The UK’s asking house price index published by Rightmove, revealed that asking prices fell by -0.9% in August and by -2% in London. YoY nationally prices are still up 3.1%, a rise from the 2.8% recorded in July. In a relatively quiet day for economic calendar news, the only other key European data concerned Swiss money supply and sight deposits, all three readings were effectively unchanged. GBP/USD rose by circa 0.3% to 1.2896, however, versus its other main peer, the euro, it fell; EUR/GBP ending the day up circa 0.4%, at 0.9157. The euro enjoyed moderate gains versus several peers, EUR/USD up approx. 0.6%, at 1.1809. With the exception of the UK’s FTSE 100, which closed effectively flat (down 0.07%), European equities fell sharply; euro STOXX 50 closing down 0.75%, DAX down 0.82%, and the CAC down 0.42%.
Political turmoil (induced by Trump) in the USA, appeared to take a backseat on Monday and in a quiet day for global data releases, trading activity in the SPX was approx. 20% below its thirty day trading average. The general consensus of opinion, from the analyst community, in an unusually light economic news day, was that most investors, particularly those who have the size to move our markets, have one eye on the Jackson Hole summit which begins on Thursday. More detail of which we’ll deliver via our high impact, news event, email communique, later this week.
The Federal Reserve Chair Mrs. Janet Yellen and The (ECB) European Central Bank President Mario Draghi will be one of the high level officials addressing this year’s instalment of the now famous annual conference, which is always hosted by the Kansas City Fed. The noteworthy summit, held in the Wyoming mountain retreat named “Jackson Hole”, comes
as two of the leading global central banks begin to discuss and finally address, just how they’ll end the years of unprecedented monetary easing, which has, for example, left the Fed with a $4.5 trillion balance sheet. How they can possibly unwind from this gargantuan sum and predicament, without equities falling significantly and or corporate borrowing costs rising accordingly, is one of the most challenging exercises in financial engineering attempted in the modern era.
The main USA equities closed up marginally; DJIA up 0.16%, SPX up 0.10%, the tech dominated NASDAQ index closed down marginally, by 0.04%. The dollar index fell by circa 0.3% through the day, USD/JPY fell to circa 108.87 late into the New York session, falling approx 0.3% and reaching a closing level not witnessed for close on four months. Gold rose by 0.5% to end the day at approx. $1291 per ounce, after reaching a daily high of $1294. WTI oil fell by approx 1.5% on the day, resting on S1, at $47.51 per barrel.
Significant economic calendar events for August 22nd, all times quoted are London (GMT) time
08:30, currency impacted GBP. Public Sector Net Borrowing (Pounds) (JUL). The forecast is for a fall to 0.3b, from the 6.3b recorded in June.
08:30, currency impacted GBP. PSNB ex Banking Groups (JUL). The forecast is for a fall to 1.0b, from the 6.9b recorded in June.
09:00, currency impacted. EUR Euro-Zone ZEW Survey (Economic Sentiment) (AUG). The survey will be carefully watched for any change, from the 35.6 reading recorded in July.
09:00, currency impacted EUR. German ZEW Survey (Economic Sentiment) (AUG). The reading is forecast to fall to 15, from the 17.5 registered in July.
12:30, currency impacted CAD. Retail Sales (MoM) (JUN). Sales are predicted to fall to 0.3%, from the 0.6% recorded in May.
13:00, currency impacted USD. House Price Index (MoM) (JUN). The expectation is for a modest rise in June to 0.5%, from the 0.4% printed in May.
13:00, currency impacted USD. House Price Purchase Index (QoQ) (2Q). The forecast is for a figure similar to the 1.4% rise registered in Q1, to be revealed.
