FINANCIAL MARKET REVIEW FOR AUG 14, 2018 - VINSON FINANCIALS

FINANCIAL MARKET REVIEW FOR AUG 14, 2018

Economic data released through the Asian session this morning was on the heavier side, with key stats including July business confidence figures out of Australia, July fixed asset investment, industrial production and retail sales figures out of China, with finalized June industrial production figures out of Japan due out later in the morning.

For the Aussie Dollar, the NAB Business Confidence Index rose by 1 point to +7 points, which was better than a forecasted hold at +6 points.

The business conditions index fell by 2 points to +12 points, with the downward trend continuing since April, while holding above long run averages.

On the business conditions side, while the employment index rebounded in July, business conditions eased across most industries, with the exception of construction, which reported a sharp rise, the retail sector seeing further weakness in July.

The Aussie Dollar moved from $0.72705 to $0.72752 upon release of the figures, the slight uptick in business confidence having a relatively muted impact as business conditions continued to decline since the start of the 2nd quarter.

Out of China: Fixed asset investment rose by 5.5% year-on-year, falling short of a forecasted and June 6% rise.

Industrial production rose by 6% in July, year-on-year, which was worse than a forecasted 6.3% increase, following June’s 6% rise.

Retail sales rose by 8.8% in July, year-on-year, which was worse than a forecasted and June 9% increase.

The Aussie Dollar moved from $0.72753 to $0.72749 at the time of release of the data, before recovering to $0.7275 at the time of writing, up 0.07% for the session.

Elsewhere, the Japanese Yen was down 0.17% to ¥110.89 at the time of writing, with the Kiwi Dollar up 0.29% to $0.6598, the market sell-off at the start of the week easing in the early hours.

In the equity markets, it was a mixed start to the day, with the Nikkei rallying 1.17% and the ASX200 up 0.76%, while the Hang Seng and CSI300 were down 0.94% and by 0.74% respectively weighed by weaker data out of China. A pullback in the Yen provided some much needed support to the Nikkei, with a softer U.S Dollar providing some respite to mining stocks, with the big 4 Aussie banks also on the rise through the session.

The Day Ahead: For the EUR, economic data scheduled for release out of the Eurozone this morning is on the heavier side, with key stats including finalized July inflation figures out of Germany, France and Spain, prelim 2nd quarter GDP numbers out of Germany and 2nd estimate GDP numbers out of the Eurozone, together with Eurozone and German economic sentiment and Eurozone industrial production figures.

Focus will be on the German 1st estimate GDP and economic sentiment figures together with the Eurozone’s industrial production number, though any material deviation in the Eurozone’s 2nd quarter GDP numbers from 1st estimate will also likely influence, though only in the event of weaker than 1st estimate numbers.

vinsonfinancial.com | (+357) 250-288-6163 | general@vinsonfinancials.com

FINANCIAL MARKET REVIEW FOR AUG 14, 2018

Outside of the data, geo-political risk will continue to play a hand in the direction of the EUR through the day, the markets looking for an action plan by the Turkish government to stem the slide in the Turkish Lira, though whether the Turkish government will be able to convince the global financial markets that there will be no defaults remains to be seen.

At the time of writing, the EUR was down 0.03% to $1.1407, with today’s stats and geo-political risk in focus.

For the Pound, it’s a big day ahead, with key stats scheduled for release including June unemployment and wage growth figures together with July claimant count numbers.

Weak stats and that should be it from a BoE perspective, anything positive and there could be a glimmer of hope for the hawks that would provide the Pound with some support, though Brexit will continue to be the key driver near-term.

At the time of writing, the Pound was up just 0.01% to $1.2772, with today’s stats and Brexit chatter the key drivers through the day.

Across the Pond, stats are on the lighter side, with economic data scheduled for release out of the U.S this afternoon being limited to July import and export price index figures.

The numbers are unlikely to have a material impact on the U.S Dollar ahead of tomorrow’s retail sales figures, barring a material rise in prices that would reflect the early effects of the ongoing trade war.

At the time of writing, the Dollar Spot Index was down 0.11% to 96.281, with noise from the Oval Office in focus through the day.

For the Loonie, it’s another quiet day on the data front, leaving NAFTA chatter and market risk appetite to provide direction through the day.

At the time of writing, the Loonie was up 0.14% to C$1.3115.

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vinsonfinancial.com | (+357) 250-288-6163 | general@vinsonfinancials.com