Sterling rebounds from recent losses

Thursday, September 11, 2014

In Asia, the Hang Seng index retreated for a fifth consecutive session overnight, falling by 45 points (-0.20%) following the recent downside momentum and the ongoing concerns about a slowdown in the Chinese economic growth. China reported weaker than expected inflation data for August as Chinese CPI rose by 2.0% versus estimates of a 2.2% increase. However, the Nikkei index continued its uptrend and climbed more than 100 points (+0.76%).  

Hang Seng Index

HSI Index (Hong Kong Hang Seng I 2014-09-11 08-56-58

The US equity markets rebounded yesterday as both the Dow Jones and S&P 500 indices posted fresh gains after climbing more than 0.3%. The USD index remains fairly strong at 84.2, weighing on most commodity prices. According to news from Thomson Reuters, President Obama told the US yesterday that he had authorised US airstrikes for the first time in Syria and more attacks in Iraq in a broad escalation of a campaign against the Islamic State militant group. On the macroeconomic front, the release of the US weekly jobless claims as well as Fed’s monthly budget statement could provide further signs of the US market conditions, setting the tone in today’s trading session for the equity and commodity markets. 

In the UK, RICS house prices balance was reported at 40% in August compared to 49% in July, missing expectations of 47%. Sterling rebounded from recent losses and traded around 1.6225 this morning. European equity markets posted fresh gains in early trading this morning, while the German CPI inflation data was unchanged in August, showing a 0.0% inflation m/m, while consumer prices rose 0.8% y/y in August.    

GBPUSD Spot

GBPUSD Curncy (GBP-USD X-RATE)  2014-09-11 08-57-18

Energy: Brent front month futures plunged to a 17-month low yesterday trading around $98 per barrel following a fairly bearish US DOE oil inventories report yesterday which showed large builds in the US refined oil products including gasoline and distillate stocks. This morning, Brent futures extended losses towards $97 per barrel in early trading. The recent macroeconomic picture remains fairly gloomy while bearish oil fundamentals weighed further on market sentiment, offsetting any geopolitical risks in Middle East.  

Brent Front Month Futures

CO1 Comdty (Generic 1st 'CO' Fut 2014-09-11 08-57-44

 

Events for today:

 

0001

UK

Aug

RICS House Prices

0230

CN

Aug

CPI & PPI

0700

DE

Aug

CPI & HICP

1330

US

w/e

Jobless Claims

1530

US

w/e

EIA Nat Gas

1900

US

Aug

Fed Budget

 

 

All times UK Local Time

 

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