Daily Review – Wednesday 12-Oct-2016

Daily Review – Wednesday 12-Oct-2016

US Labour Market Conditions Index

The LMCI dropped 2.2 points in September. A further decline from August which was -0.7 points.

The index has fallen in seven of the last eight months and provides a snapshot of the overall US labour conditions.

The relatively weak numbers of this index over the past few months have supported the FED’s decisions to not increase interest rates.



US NFIB Small Business Index

The index of small business optimism fell 0.3% in September compared to previous month.

Analysts were expecting a continuing upward trend that started since April’16, however, the results showed that small businesses were pessimistic about new job openings and increasing their inventory levels.

On the upside, the outlook on economic conditions were mostly positive.



Canadian Housing Starts

September was a good months for the start of new residential building projects.

Where the market expected 194K project starts, the actual number for September was 221K.

Quebec saw the largest gain in housing starts due to the development of new rental apartments intended for seniors.



UK BRC Retail Sales Monitor YoY

British retail sales were up 0.4% compared to the same month last year. A turnaround from the -0.9% in August’16.

Retailers have indicated that they foresee challenging times ahead as the weak pound increases their import costs and consumer confidence is pressured by economic uncertainty as a result of Brexit.



European Area ZEW Economic Sentiment

The overall economic outlook for the Eurozone is on the rise since August and reported an unexpected positive figure of 12.3 for October. The result came in almost double the forecasted figure of 6.3.

However, the Eurozone is mainly driven by the German economy, therefore investors and analysts are more drawn to the German figures.



German ZEW Economic Sentiment

The economic sentiment index for Germany came in at 6.2 points in October, up 5.7 points from previous month.

This improved economic sentiment is a positive sign for the German economy. However, it is important to note that Germany is still exposed to risk, the banking sector in particular.



Japanese Economy Watchers Sentiment

After rising for the past two months, the index decreased in September to 44.8, while the forecast was expecting a rise to 45.9. The index surveys peoples’ assessment of the Japanese economy.

Any reading above 50 indicates optimism and below 50 suggests pessimism.



Australian Home Loans MoM

The number of new home loans granted in August came in lower than expected. Where analysts forecasted a drop of 1.3% compared to July, the actual number was -3.0%.

This figure is a leading indicator of demand in the housing market as most homes are financed through mortgages. It tells us how many qualified buyers are entering the market of owning their own homes.



Australian NAB Business Confidence

Australian business confidence remained optimistic according to the NAB survey with a score of 6.

A score above 0 indicates improving conditions whereas below signals worsening conditions.

This is a leading indicator of economic health and changes in their sentiment can be an early signal of future economic activity such as investments and hiring.



Upcoming Data Releases

The most interesting topics on today’s agenda are the speaking engagements of FMOC members Dudley and George. On the other side of the Atlantic, Bank of England MPC member Cunliffe will testify before the Financial Affairs Sub-Committee on the effect of the Brexit on the financial services sector. All three are voting members their respective nation’s interest rate so keep an eye on subtle clues regarding future monetary policy.

US JOLTS Job Openings

The number of job openings for October, excluding the farming sector. A leading indicator of the overall employment.



European Area Industrial Production MoM

A Leading indicator of the economic health. However, it has a relative mild impact because Germany and France, which account for about half the Eurozone’s economy, release their data earlier.



Time Data Title Currency Previous Forecast
6:30 Australian Westpac Consumer Sentiment AUD -0.3% 1.1%
6:50 Japanese Core Machinery Orders MoM JPY 4.9% -4.4%
13:00 German WPI MoM EUR -0.7% 0.3%
Japanese Prelim Machine Tool Orders MoM JPY -8.4%
13:45 French Final CPI MoM EUR -0.2% -0.2%
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