Gold is on the rebound today after central bank news from around the world pointed to reduced pressure on central banks to tighten monetary policy, and removing some of the support from paper money.
GBP has had the biggest drop this morning following lower than expected UK inflation readings which solidifies the case for the Bank of England to hold off on raising rates. US inflation was in line with expectations and right on target at 2.0% which may enable to doves at the Fed to keep the hawks at bay for a while longer yet. Testimony from Sweden’s Riksbank indicated support for lower rates to get the economy moving and fight off deflation while RBA minutes indicates an uncertain economic outlook. Overall, this news suggests central banks may go neutral on interest rates for a while.
around the world are trading higher today. Asia Pacific markets had a catchup rally overnight and European markets have been building on yesterday’s gains but rising at a slower pace. US action appears troubling however. Although the NASDAQ rallying to another 14-year high looks encouraging, the Dow popped on strong housing numbers initially but has since slumped back suggesting that the current advance may be starting to run out of gas. That being said, retailers could be active today after home Depot beat the street and raised guidance.
It also suggests that traders may be looking past data for now and focusing firmly on tomorrow’s FOMC minutes and the Jackson Hole speeches later in the week
Home Depot $1.52 vs street $1.44, raised FY guidance to $4.52 from $4.42.
Economic reports released overnight and this morning include:
US consumer prices 2.0% as expected vs previous 2.1%
US housing starts 1,093K vs street 966K
US building permits 1,052K vs street 1,000K
UK consumer prices 1.6% vs street 1.8%
UK retail prices 2.5% vs street 2.6%
UK producer input prices (7.3%) vs street (6.4%)
UK producer output prices (0.1%) vs street 0.0%
UK house prices 10.2% as expected
NZ producer 0.2% vs previous 0.1%
NZ inflation expectation 2.2% vs previous 2.3%
Japan leading index 105.9 vs previous 105.5
Economic reports due later today include:
There are no major announcements scheduled for North America later today.