Happy New Year to our readers.
The New Year in the Islamic world and various other holidays around the world coupled with August being a traditional holiday month leaves the markets illiquid and lacking in direction.
Despite this the latest USA unemployment data released on Friday were better than expected, which may be a result of unemployment benefits being withdrawn, but either way it helped equities and the US$ to rally. The market perceives the chances of tapering being brought forward are increasing.
We get a further guide on inflation with USA CPI and PPI numbers and with thin markets anything outside expectations will have a disproportionate impact.
The Bank of England turned a little more hawkish but it did hold rates, by a unanimous vote, at 0.1% but it did warn of tightening ahead but in tandem with the Fed feel that the present inflation will be transitory.
Commodities generally had a weaker week with oil, copper, platinum and palladium sliding, but aluminium held recent gains on supply concerns. It appears that the resurgence of Covid in China and recent weaker manufacturing figures are impacting price confidence in commodities.
Date | Country | Figures | Expected | Previous |
Aug 11 | USA | CPI yy ex food and energy | 4.3% | 4.5% |
Aug 12 | UK | GDP q/q | 4.8% | -1.6% |
| UK | Trade balance | -£9.2B | -£8.48B |
| USA | PPI y/y | 7.4% | 7.3% |
| USA | Initial Jobless claims | 373k | 385k |
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