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AM Bulletin: Troubles at Deutsche rile investors
30 Sep 2016
AM Bulletin: OPEC “deal” sends oil soaring
29 Sep 2016
Video Update: Trouble at Deutsche Bank
28 Sep 2016
AM Bulletin: Banks lead equity rally
28 Sep 2016
PM Bulletin: USDJPY – set to break below 100?
27 Sep 2016
AM Bulletin: Equities rally after “Clinton win” in presidential debate
27 Sep 2016
Trading Guides: How margin works with spread betting
26 Sep 2016
Weekly Bulletin:Fed rate hike: postponed or cancelled?
26 Sep 2016
AM Bulletin: Equities dip after central bank-driven rally
23 Sep 2016
Video Update: FOMC keeps rates on hold
22 Sep 2016
AM Bulletin: Fed loses the (dot) plot
22 Sep 2016
PM Bulletin: FOMC in focus
21 Sep 2016
AM Bulletin: Mixed messages from BOJ
21 Sep 2016
PM Bulletin: BOJ look-ahead
20 Sep 2016
AM Bulletin: Stock indices swing on oil price
20 Sep 2016
Trading Guide:Fundamentals - Developing trading ideas
19 Sep 2016
Weekly Bulletin: All eyes on the Fed and BOJ
19 Sep 2016
PM Bulletin: Developed World Top Trumps
16 Sep 2016
AM Bulletin: Weak US data boosts equities
16 Sep 2016
Video Update: What to expect from the Fed
15 Sep 2016
AM Bulletin: US Retail Sales and BoE rate decision ahead
15 Sep 2016
PM Bulletin: The BoE and Beyond
14 Sep 2016
AM Bulletin: Investors nervous ahead of Fed meeting
14 Sep 2016
PM Bulletin: US stock indices coming under pressure
13 Sep 2016
AM Bulletin: Fed keeps us guessing
13 Sep 2016
Weekly Bulletin: Central banks remain in focus
12 Sep 2016
Trading Guides: How to make money spread betting
12 Sep 2016
Comparing major Central Banks
09 Sep 2016
AM Bulletin: ECB disappoints
09 Sep 2016
Video Update: Is the Fed really data-dependent
08 Sep 2016
AM Bulletin: ECB rate decision in focus
08 Sep 2016
Video Update: ECB Look- ahead
07 Sep 2016
AM Bulletin: Weak US data reduces likelihood of September hike
07 Sep 2016
PM Bulletin: EURUSD – still range bound
06 Sep 2016
AM Bulletin: Traders back after long US weekend
06 Sep 2016
Weekly Bulletin: Poor NFP suggests no September rate hike
05 Sep 2016
PM Bulletin: Non-Farm Payrolls disappoint
02 Sep 2016
Holiday Schedule: Labour Day, 5th September 2016
02 Sep 2016
AM Bulletin: All eyes on US Non-Farm Payrolls
02 Sep 2016
Video Update: Look-ahead to Friday's Non-Farm Payrolls
01 Sep 2016
AM Bulletin: Stock indices bounce back
01 Sep 2016
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Indices Update

There’s a mixed tone to European equities this morning. For the most part Europe managed to shrug off the weaker US close and took heart as crude oil steadied following yesterday’s sell-off.

Global stock indices pulled back yesterday with the major US indices giving back all their gains from the beginning of the week. This was despite the soothing words from Federal Reserve Governor Lael Brainard on Monday night when she said she wanted to see a stronger trend in US consumer spending and evidence of rising inflation before the Fed raises rates. Dr Brainard is well known for her dovishness. However, there was concern amongst some investors that she would follow her colleague Eric Rosengren and indicate a preference for a September rate hike. It was Dr Rosengren’s speech on Friday which triggered the stock market sell-off as investors recalculated the odds of a Fed rate hike next week. Dr Rosengren is a voting member of the FOMC and so his comments carry some weight. He expressed his personal view that “a failure to continue on a path of gradual removal of accommodation could shorten, rather than lengthen, the duration of this recovery.”

The FTSE 100 ended the day 35 points lower at 6,665.6

The German DAX fell 45.2 points or 0.4% to end the day at 10,386.6

The US30 closed down 258.3 points to finish at 18,066.8 The S&P 500 fell 1.5% to close at 2,127 while the Nasdaq 100 lost 0.9% to close at 4,722.9


Ocado (OCDO) fell sharply in early trade yesterday. The sell-off came despite the company reporting retail sales growth of 13.6% and an increase of 18.9% in the average number of orders per week when compared to the same period last year. Investors dumped the stock following comments made by the delivery service’s chief executive who said the company is facing ongoing margin pressure due to the competition in the supermarket sector. This has become even more of an issue now that Amazon (AMZN) is making inroads into online food retailing. The stock ended the day down 13.7% at 278 pence.

Commodities Update

The latest US inventory update from the American Petroleum Institute (API) showed a smaller-than-expected build in crude stockpiles. Crude stocks rose by 1.4 million barrels for the week ending 9th September which was less than the 3.8 million expected. The news helped to lift crude following Tuesday’s sell-off.

Oil fell sharply yesterday following the release of a market update from the International Energy Agency (IEA). The agency reported that, contrary to earlier forecasts, there was evidence of a sharp slowdown in global oil demand growth. The IEA downgraded its prediction for demand growth for this year by 100,000 barrels to 1.3 million barrels per day (bpd). At the same time, supply is rising as the world’s major producers continue to ramp up output. As a consequence, inventories continue to increase and come in at record levels meaning that it will take somewhat longer than previously expected for markets to rebalance. Last month the IEA forecast that supply and demand was set to be back in balance in the fourth quarter of the year.

This report followed on from other bearish news. OPEC has just revised up estimated oil output from competitors outside the group. In addition, US producers added drilling rigs for a tenth week running.

Gold and silver drifted lower yesterday. However, losses were limited as investors reassessed the odds on the US Federal Reserve raising interest rates at next week’s FOMC meeting. Both precious metals sold off heavily last week as investors began to price in the increased possibility of monetary tightening from the Fed. The probability of a September rate hike had diminished recently following the release of some disappointing US economic data. The latest Non-Farm Payroll number fell short of expectations while August’s ISM Manufacturing and Non-Manufacturing PMIs dropped sharply from the month before. The weaker numbers persuaded investors that the US central bank would wait until December to tighten monetary policy. However, on Friday Boston Fed President Eric Rosengren delivered a speech which appeared to open the door for a September hike. The US dollar rallied and this helped to push precious metals lower. Some of the damage was reversed yesterday following a speech on Monday from FOMC-voting member Lael Brainard. Dr Brainard delivered the last public comment from any Fed member ahead of next week’s meeting and she said it would be wise for the Fed to hold off from tightening monetary policy at this time.

Forex Update

The US dollar rallied yesterday as investors dumped higher-yielding currencies in a general risk-off move. Equity markets fell sharply as investors prepared themselves for next week’s crucial Federal Reserve rate decision. The move brought heavy losses for the Aussie dollar, British pound and Canadian dollar. The latter came under additional selling pressure as crude oil fell sharply.

The risk-off move came despite a dovish speech on Monday from FOMC-voting member Lael Brainard. Dr Brainard delivered the last public pronouncement from the Fed before it went into purdah ahead of next week’s rate meeting. Dr Brainard said it would be wise for the Fed to hold off from tightening monetary policy at this time. The dollar fell initially, and some of yesterday’s rally could be explained by an over-reaction to Dr Brainard’s speech.

The British pound fell sharply yesterday. The sell-off followed the release of some disappointing economic data. Core CPI (excluding food and energy) came in at an annualised rate of +1.3% on expectations of a +1.4% reading. House price and PPI numbers also added to the downside pressure. Nevertheless, cable continues to trade in a narrow trading range which wasn’t breached during yesterday’s sell-off.

Upcoming events

Today’s significant economic events include the UK’s Claimant Count Change, Average Earnings Index and Unemployment Rate. We also have Swiss ZEW Economic Expectations and Euro zone Industrial Production. From the US we have Import Prices and Crude Oil Inventories. 


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Posted by David Morrison

Category: AM Bulletin

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