Quiet day in the market
Most notable is oil where the news of Enbridge reopening the pipeline is pushing the price lower.
Gold continues to perform well.
This is going to be very range bound market driven by sentiments that would continue to over and undershoot reality.
Economic data show that we are right on the line between recovery and recession.
Inflation data show that we are right on the line between inflation and deflation.
The only asset I would hold naked long now is gold. And maybe some ags depending on their own micro drivers. Relative value and tactical trades would be key.
Japan manufacturing sentiment rapidly falling apart
• Japanese manufacturing confidence worsened in September from the previous month for the first time in nearly a year as companies struggle with a persistent yen rise that threatens a fragile, export-reliant economic recovery, a Reuters poll showed.
• There were numerous comments that (1) profitability has declined on dollar-denominated contracts due to yen strength, (2) incoming order growth is sluggish, and (3) the sense of recovery in the market has stalled. Moreover, the December outlook deteriorated to +2, 15 points down on the current outlook of +17, marking the largest deterioration since the survey was started in 1998.
U.K. Retail Sales Post Surprise Fall, manufacturing orders are weakening and job market continues to falter
• U.K. retail sales fell unexpectedly and sharply in August, reflecting consumers' concerns about government spending cuts and a reversal in the job market.
• The volume of retail sales dropped 0.5% from July, the first decrease since January, and the annual rate of growth slowed to 0.4%, the government statistics office said. The agency observed a broad-based decline across both food and nonfood stores.
• The result, together with other news Thursday of contracting order bookings among U.K. manufacturers, added to evidence that Britain's economic recovery is losing pace in the second half of the year.
• The faltering recovery is in line with that of the 16-nation euro zone, where only Germany is bucking the trend with robust growth, led by exporters and consumers.
Switzerland keeps interest rate stable and cuts inflation outlook. No comment on strength of CHF
• SNB kept interest rate the same and made some dovish comments like all the other central banks do (we are concerned about global recovery…)
• SNB also stated that domestic recovery was much more powerful than expected but it is likely to slow down substantially due to strength of CHF and slowdown in global economy.
US weekly jobless claims falls more than expected. A minor sigh of relief
• Claims for the week to September 11 fell to 450,000, down 3,000 from the previous week's revised figure, bringing them to their lowest level since May.
• The latest figure was better than most economists' expectations of 460,000 new claims, adding to a string of positive indicators in recent weeks that bolstered optimism about the recovery.
• Still, 450,000 is a DISMAL number given that we’re supposed to be a year into an economic recovery.
US PPI remains at rock bottom
• U.S. producer prices rose for the second month in a row in August at 0.4% as energy costs increased.
• Still, the government report showed that underlying inflation pressures remain very low. Stripping out more-volatile food and energy prices, producer prices rose by just 0.1%.
Philly Fed manufacturing survey weak for second month in a row
• Manufacturing activity in the Philadelphia region has stalled as the survey released Thursday by the Philadelphia Federal Reserve shows the second month of declining new orders and shipments.
• The report covers businesses in the third federal district, which encompasses eastern Pennsylvania, southern New Jersey and Delaware.
Tomorrow:
US CPI
US U of Michigan consumer confidence
Neither likely to be much of a market driver
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