The US$ and stockmarkets are under pressure on Friday, ahead of the upcoming CPI reading, after the PPI unexpectedly fell in July by recording the biggest drop in 11 months and pointing to a further moderation in inflation that could delay any Fed interest rate hike. In the 12 months through July, the PPI increased 1.9%, after rising 2.0% in the year through June, and came in below expectations of a rise of up 0.1% last month and 2.2% from a year ago. The Fed’s Dudley was speaking, and was fairly non-committal on any interest rate hikes although the market seems to take a slightly dovish view of his remarks despite his outlook of continued moderate economic growth/economic strength. Stocks fell by around 1% -1.5% and look increasingly heavy, while WTI had a bearish outside day and ended down around 2%. The metals liked the weaker dollar, and Gold/Silver rallied by around 1%/1.5% respectively.
Friday is going to be all about the US CPI figure (expect; CPI, 0.2%mm, 1.2%yy; Ex Food/Energy, 0.2%mm, 1.8%yy) and until then it is going to be pretty much dead, I suspect, unless the German Inflation figure moves the Euro around (exp; CPI, 0.4%mm, 1.7%yy; HICP 0.4%mm, 1.5%yy) or Donald Trump’s Twitter account gets busy. Let’s hope not. Japanese holiday. The RBA Governor Lowe will be speaking this morning and may attempt to send the Aud$ lower. Have a good weekend.
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|INDICES / COMMODITIES|
|ASX SPI: 5633|