Debate for “lift off” continues, will December’s job numbers be the decider?

Yesterday’s markets

19th November 2015

  • US FOMC Member Dudley Speaks
  • US Building Permits: 1.15M
  • US Housing Starts: 1.06M
  • US Crude Oil Inventories: 0.3M
  • US FOMC Meeting Minutes
  • NZD PPI Input q/q: 1.6%
  • JPY Monetary Policy Statement

Last night, the FOMC leaned towards a rate hike although the intention may well have to give the perception “that no decision has been made”. The FOMC put emphasis on the committee being split into three camps. Some participants thought that the conditions for beginning the policy normalisation process had already been met. Most participants anticipated that, based on their assessment of the current economic situation and their outlook for economic activity, the labor market and inflation, these conditions could well be met by the time of the next meeting, whilst others were still cautious. As a result, next month’s Non-Farms Payrolls will have a great deal of focus; as a bad number could be enough to sway the maybes.

This morning the Dollar is weaker despite the minutes leaning more towards a rate hike due to indications that any hike will be implemented at a slow gradual pace.

In the world’s second largest economy, Chinese President XI Jingping warned that the country’s economy faces “considerable downward pressure”. XI Jingping spoke at the Asia-Pacific Economic Cooperation chief executive’s summit in Manila yesterday. Fears in China are spreading in the financial sector as a crackdown by authorities in an anti-corruption campaign have increased. Hedge funds, traders and even the market’s watchdogs are being targeted by authorities. 

Today’s markets

18th November 2015

  • JPY BoJ Press Conference
  • UK Retail Sales m/m
  • EUR ECB Monetary Policy Meeting Accounts
  • US Unemployment Claims
  • US Philly Fed Manufacturing Index
  • US FOMC Member Lockhart Speaks
  • US FOMC Member Fischer Speaks

UK interest rate expectations could take a further dent today if the retail sales number does not surpass expectations. Retail sales make up a large part of the GDP and with the momentum in growth already slowing, it could further hinder this number. Retail sales are expected to decline by 0.4%, this is in large due to the Rugby World Cup Sales in the previous month. Meanwhile, the weekly jobless claims and the Philly Fed Manufacturing numbers hit the wires.