Market update – September 17

Market News

• The markets were modestly weaker heading into the weekend and next week’s FOMC meeting. Treasuries have cheapened after being pressured by yesterday’s unexpected rise in US retail sales and the Philly Fed headline data that support the Fed’s hawks who have been arguing for announcing QE tapering near term.
• Taper speculation, the rising drumbeat of higher taxes and China risks remained in focus, adding selling pressure on stocks. Global stocks seem to be heading for a weekly loss.
• Wall Street also slumped, failing to benefit from the good news, while it ended mixed. – Profit taking.
• ECB’s Lane reportedly revealed inflation could hit 2% target by 2025.
• UK retail sales unexpectedly corrected -0.9% m/m in August. A pretty dismal result that left sales unchanged compared to August last year. – Counterbalance the stronger than expected labour market and inflation reports.
• The USA30 and USA500 closed with declines of -0.18% and -0.16%, respectively, with the USA100 bouncing with a 0.13% gain. JPN225 is still up 0.5%.
• The JPY declined across the board and USDJPY lifted to 109.98.
• EURUSD remains below the 1.18 mark at 1.1769 currently, while GBPUSD is slightly above 1.38.
• USOil off the highs seen earlier in the week, but still supported by supply concerns.
• Gold dipped to $1,745 yesterday, as higher yields hurt the non-interest bearing metal.

Today: Trading is likely to be in a narrow range with most investors moving to the sidelines in a wait-and-see stance. Today’s data calendar brings the final reading for Eurozone August CPI, which is unlikely to show major revisions and will leave the headline far above target. The preliminary consumer sentiment index from the University of Michigan survey shouldn’t have much impact.

Biggest Mover @ (06:30 GMT) CADJPY rallied to 86.81. Fast MAs flattened implying a further rise in the short term, with RSI at 69 but rising while MACD lines keep extending above the neutral zone. ATR (Daily) at 0.599 and ATR (H1) at 0.081.

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Andria Pichidi

Market Analyst

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