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A dovish Draghi drags the Euro lower

Last week the focus of the markets were on the ECB conference and on the non-farm labour data from the US. A dovish Draghi saw the Euro fall to a two week low, as comments given signaled that the ECB were able to increase stimulus to counter the risk of slower growth and stagnant inflation.  Policy makers also lowered the economic forecasts and increased the limit on bond purchases from 25% to 33%, under their current QE program. 

After the ADP figure from the US on Wednesday fell slightly below expectations, the actual non-farm figure released on Friday was still forecasted to be above 200k.  This did not materialize and fell short posting a reading of 173k, well below what the markets were expecting.  However, July’s reading was revised up to 245K and the actual unemployment rate fell to an 8 year low and now stands at 5.1%.  Trading of the Greenback was very erratic as markets tried to digest this mixed data. With the next Fed meeting on the 17th September the probability of a rate hike happening here is very slim.

Monday 7th September 2015

A bank holiday in the US, therefore a very light day in terms of data releases.  Today has only seen one release which came out early this morning from Germany.  The monthly industrial production figure disappointed with a posting of 0.7% falling below the market census of 1.2%.

  • German Industrial Production m/m

Tuesday 8th September 2015

As concerns with China continue, the trade balance number is released in the early hours of the morning.  It is expected to show more goods were exported and imported which would be a welcome sign for China at present. 

From the UK the release of the Halifax house price index is also to be seen in the morning and expected to increase to 0.5%. 

  • CNY Trade Balance
  • UK Halifax HPI m/m

Wednesday 9th September 2015

A pick-up in data with the UK being much of the focus, firstly with the monthly manufacturing production reading which is due to remain constant at 0.2%.  At the same time the trade balance figure is due out and is to be down on last months -9.2bn.  Lastly from the UK in the afternoon the National Institute of Economic and Social Research releases the estimated GDP of the last three months.

From the US, the jolts job openings gauge is seen with jobs set to slightly increase and show more positives for the US labour markets. 

  • UK Manufacturing production m/m
  • UK Trade Balance
  • UK NIESR GDP Estimate
  • US Jolts Job Openings

Thursday 10th September 2015

High-tier data will be seen as China’s inflation figure will be released and is expected to be at 1.9%.  From the UK the Bank of England official interest rate will be posted and with no change will remain at 0.50%.  At the same time the MPC vote on interest rates and asset purchases will be released, with expectations of the votes to remain the same as the previous results 1-0-8.  If we do see anything other than this, expect to see volatility around the Pound as this will give markets an insight into if the BoE are moving towards or away from a rate increase.

  • China CPI y/y
  • UK MPC official Bank Votes
  • UK Official Bank Rate
  • UK Asset Purchases

Friday 11th September 2015

A quiet finish to the week as data from the US is released just after lunch.  The first data release will be the producer price index which is a monthly reading on the change in price that producers charge and ultimately pass onto the consumer.  As the Fed have stated that inflation is a key gauge that is to be monitored and can determine when to raise rates, all data relating to inflation could cause volatility for the Dollar.  Later in the afternoon, the University of Michigan Consumer Sentiment is released which will give an insight into the financial confidence.

  • US PPI
  • US UoM Consumer Confidence