Daily Commentary BY THE CURVE TEAM –

Headlines Not Catching Eyes Of Markets

30th of August, 2017

Geopolitical events and turbulent weather continued to grab headlines overnight, however the market is remaining focused on some more positive data released in the US and what is yet to be released.

Commodities markets are feeling the brunt of Hurricane Harvey, which is still causing havoc in Texas. WTI Oil futures continued to fall and the market is starting to see this factoring into US Q3 growth.

In contrast, the trend towards safe haven assets seems to have reversed following yesterday’s North Korean missile launch after another strong consumer confidence reading in the US combined with more strong employment data.

It seems the market is looking towards the Non-Farm Payrolls along with more inflation data before any substantial moves will be seen. In particular, these releases will be watched carefully by members of the FOMC, who could be starting to feel the pressure of persistent low inflation despite improved labour conditions. Fed fund futures are now pricing a rate hike by the end of the year at 28%, down from 42% two weeks ago.

Some key data releases locally today as we lead into next week’s GDP reading, with Q2 Construction Work Done and July Building Approvals both due this morning.

Oliver Parsons

Client Relationship Officer