The calm before the storm

Yesterday’s markets

15th September 2015

  • CHF PPI m/m: -0.7%
  • CHF Retail Sales y/y: -0.1%
  • EUR Industrial Production m/m: 0.6%
  • AUD Monetary Policy Meeting Minutes
  • JPY Monetary Policy Statement

Yesterday’s market action was very subdued as markets steady themselves for this week’s much anticipated Federal Reserve meeting. After a decline in unemployment to 5.1%, the labour market has shown further improvement, therefore a strong case can be made for a September rate hike. The Fed however are failing on the price stability leg of the mandate with inflation standing at 0.3% and core inflation falling to 1.2%. Economists’ are split with the latest Bloomberg survey giving a September rate hike the edge, however extremely narrowly.

The only piece of data to note yesterday was released from the Eurozone. Eurozone industrial production posted a better than expected 0.6% figure, doubling forecasts and posting its best reading in five months. Surprisingly, Greece posted one of the highest increases in industrial production, climbing to 4.3%. The decent reading bolstered the Euro and decreased some of the many pressures still surrounding the Greek economy.

Today’s markets

14th September 2015

  • BoJ Press Conference
  • UK CPI y/y
  • UK PPI Input m/m
  • UK RPI y/y
  • German ZEW Economic Sentiment
  • EUR ZEW Economic Sentiment
  • US Core Retail Sales m/m
  • US Retail Sales m/m
  • GDT  Price Index

Global inflation levels are the main restrictions that central banks are finding when discussing the raising of interest rates. Today sees the key consumer price index (CPI) from the UK, which is the preferred inflation measure by the BoE. Inflation is expected to ground to a halt posting a zero annual reading. There is other key data out today with the German ZEW which surveys 275 German institutional investors and analysts about the 6 month view. Given the impact of the Chinese turmoil and intervention it will be interesting to see how this post. Crossing the pond to the US, the focus is on the consumer with the release of the retail sales.