Gold reaches a 2017 high due to North Korean tensions, European indices slump due to Brexit issues

Aug 30 • Morning Roll Call • 1722 Views • Comments Off on Gold reaches a 2017 high due to North Korean tensions, European indices slump due to Brexit issues

As the USA presidential administration battled with the chaos in Houston and Louisiana, caused by tropical storm Harvey, the North Korean presidential administration appeared to take advantage of the USA’s attention drift, by firing long range missiles over Japanese air space. Despite the projectiles dropping harmlessly into Japan’s territorial waters, the fact that the potential weapons weren’t intercepted, by either Japan or the USA, should be of concern. Moreover, the North Korean leader probably now believes he holds the advantage and the trump card in this concerning and escalating game of risk. Despite the provocative firing of the missiles and the tropical storm only subsiding briefly, before regaining its intensity, the USA indices only reacted moderately, whereas Asian indices sold off sharply in early morning trade, before recovering.

In terms of USA economic calendar news, the Case Shiller house price index for the twenty leading cities, beat the forecast by coming in at 5.65%, the lack of sales inventory is apparently pushing up prices. Consumer confidence (as recorded by the conference board) in the USA also beat the prediction, by coming in at 122.9 for August. The DJIA closed up approx. 0.04%, SPX down 0.04% and the Nasdaq up 0.26%. Gold rallied to its highest level in eleven months to an intraday high of $1326 per ounce, before receding to $1315, up circa 0.5% on the day. WTI oil fell by approx. 1% to $46.37 per barrel. EUR/USD rose by approx. 0.4% to 1.2006, having at one point in the European trading session, reached a high of 1.2706 whilst breaching R3. GBP/USD closed the day out at approx. 1.2925, up 0.2% on the day. USD/JPY closed out at 109.17, up circa 0.2% on the day.

The UK’s house price inflation rate appears to be moderating according to Nationwide, who are one of the largest mortgage lenders in the U.K. Prices fell by 0.1% in August, taking the annual increase down to 2.1%. Other European news concerned the E.U.’s firm instruction to the U.K. that no trade deal will be considered until the issues of: free movement, guarantees of citizenship and the final exit cost/bill is ratified. France’s GDP fell to 1.7% growth annually, despite the Q2 growth figure of 0.5% coming in right on forecast. Germany’s September GfK consumer confidence reading came in ahead of expectation at 10.9. Brexit fears, as opposed to any underlying hard data missing forecasts, appeared to be the main reason that European equities slumped on Tuesday; STOXX 50 fell by 0.96%, DAX by 1.46%, CAC by 0.94% and the UK’s FTSE by 0.87%. Despite the slump in equities (or perhaps as a consequence), the euro rose versus its main peers; EUR/GBP reaching an intraday and seven year high of 93.068, whilst breaching R3, eventually the currency pair rested on R2 at 0.9287.

Economic calendar events for August 30th, all times quoted are London (GMT) time

01:30, currency impacted AUD. Building Approvals (YoY) (JUL). The forecast is for a fall to -16.6%, from the -2.3% recorded in June.

08:30, currency impacted GBP. Net Consumer Credit (JUL). The prediction is for the lending figure to be identical to the 1.5b registered in June.

08:30, currency impacted GBP. Net Lending Sec. on Dwellings (JUL). The expectation is for a fall of circa 10% to 3.8b, from 4.1b in June.

08:30, currency impacted GBP Mortgage Approvals (JUL). The anticipation is for a rise to 65.5k, from the 64.7k in June.

12:00, currency impacted EUR. German Consumer Price Index (YoY) (AUG P). Inflation is forecast to rise to 1.8%, from the 1.7% recorded in July.

12:15, currency impacted USD. ADP Employment Change (AUG). The private jobs firm data from ADP is expected to show a rise to 185k, from 178k in July.

12:30, currency impacted USD. Gross Domestic Product (annualised) (2Q S). The prediction is for a rise to 2.7%, from the 2.6% registered in the first quarter.

23:50, currency impacted JPY. Industrial Production (MoM) (JUL P). The forecast is for a sharp reversal and negative reading of -0.3%, from the 2.2% printed in June.

23:50, currency impacted JPY. Industrial Production (YoY) (JUL P). The prediction is for a fall to 5.2%, from the 5.5% registered in June.


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