US Dollar Seeks Support

Rabu, 31 Agustus 2016

On the fundamental level, next week is a busy year with a number of key data releases giving an outlook on global growth.

In Australasia, quarterly key Bank of Japan of Japan (BoJ) Tankan survey (Thursday) will be reported with retail sales last month, household spending and unemployment. A crowd of will be released worldwide, the largest being China Caixin September Thursday's PMI purchasing managers index.

From the perspective of the central bank, the Reserve Bank of India (RBI) will announce the results of its monetary policy meeting. While in the U.K., investors will have to analyze the final estimate of Q2 GDP of the economy.

However, the "piece de resistance" will digit US news job Friday (NFP + 202k and + 5.1%), while investors will be looking for clues on the when the Federal Reserve will finally to launch. its policy rate normalization

market still disagree with the Fed: Despite Yellen Fed keeping the door open for rate hikes interest this year, capital Markets continues to seek improvements in the employment landscape of the United States, as well as signs of stability in the Chinese economy slows to be convinced that a rate increase remains on the table before year end. Notwithstanding the hawkish comments from Fed chairman last week, fixed income only sees a chance 11% of an increase next month and + 35% for December. Until there is more clarity on prices, the major currency pairs are likely to remain confined to their recent ranges.

A final revision stronger than expected growth in the United States on Friday Q2 went some ways to support first Fed rate hike in a decade. The printing of the final GDP was increased to 3.9% from 3.7% in the preliminary reading and + 2.3% in the advance data with the additional force from the services component consumer spending. Commercial yield differential continues to provide the greenback with global support. However, the prospect of a cooling rate of growth in Q3 is to ensure that the dollar is not going to escape its competitors for now. For the greenback to launch the next step, the rate normalization is necessary

US political deadlock could become a problem Q4 :. Under intense pressure from conservative members of the GOP, US House Speaker John Boehner will leave Congress next month. The annual threat of a government shutdown U.S was again on the cards. With the departure of Boehner, for now, it provides short-term funding resolution will be adopted. However, in the medium term, there are fears in the market that a "speaker" more conservative can use the next issue of the debt ceiling to force a stop to government late Q4. If so, this will have negative consequences for the U.S. economy and the objectives of the Fed policy.

Lagarde not so sure anymore: During the weekend, the head of the IMF, Lagarde effectively flying the flag of a downgrade to global growth, by calling + 3, 2015 Goal 3% of GDP set there three months "realistic." She said that the growth of developing economies recovers, however, emerging markets are slowing at a faster pace. The dual challenge of China and the Fed have certainly accentuated the fall in emerging market currencies. The spotlight is now firmly on the lowest central banks to be aggressively proactive savings. Investors should expect EM Central Bankers to become more aggressively to stem the regional capital outflows.

anticipated savings are not immune to negative sentiment Global equities remain under pressure as regards most of China continue. During the night, published reports indicate that Chinese industrial profits contracted by their largest amount in a number of years, the Statistics Office blamed rising input costs and declining Yuan. A marked slowdown in the world's second largest economy continues to be the reason why the market is cautiously adjusted global growth forecasts downward and sufficient reason why fixed income dealers are in contradiction with the standard calendar Fed rates.

risk policy becomes stronger event: Progressive Syria impasse brought out the significant developments of the weekend and comments. France extends its campaign against ISIS in Syria from Iraq. While Putin is seeking a "coordinated framework" to fight against ISIS.

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