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The week in financial markets – 16 September 2016

Monday 12 September

  • China released its August activity which indicated a rebound from the softer July prints. Industrial production was reported as increasing last month to +6.3% YoY (vs. +6.2% expected) and retail sales increased to +10.6% YoY (vs. +10.2% expected). Fixed asset investment was unchanged at +8.1% YTD YoY, but came in ahead of expectations of +7.9%. That data follows the better than expected export numbers in August.
  • ECB’s latest CSPP numbers showed that after the previous short week, net purchases totalled €2.4bn (average €480mn/day) which is the second highest weekly run rate since buying began (average daily run rate of €352 since program started).

Tuesday 13 September

  • Germany’s ZEW survey dipped 2.5pts this month to 55.1 (vs. 56.0 expected). Whilst lower relative to August that reading is still some 5pts above the post-Brexit slump the index tumbled to in July. The expectations survey held steady at 0.5. The final August CPI revisions showed no surprises with the print left at 0.0% MoM and +0.4% YoY.
  • In the UK headline CPI in August was +0.3% MoM which was a shade lower than the consensus of +0.4%. RPI printed at +0.4% MoM and in line, while PPI input prices were up only +0.2% MoM (vs. +0.6% expected

Wednesday 14 September

  • In the US the only release was a slightly lower than expected import price index reading for August (-0.2% MoM vs. -0.1% expected).
  • In Europe the latest industrial production print for the Euro area was slightly softer than expected for July at -1.1% MoM (vs. -1.0% expected) whilst France reported no revision to the August CPI print of +0.3% MoM. In the UK the latest employment numbers were also released and largely met expectations. The ILO unemployment rate held steady at 4.9% YoY in the three months to July, while the Claimant Count rate was also unchanged at +2.2% YoY. Average weekly earnings did nudge down two-tenths to +2.3% YoY although that was a couple of tenths ahead of consensus.

Thursday 15 September

  • In the US, Headlines sales were down -0.3% MoM last month which was weaker than the market had pegged (-0.1% expected). The industrial production reading in August was -0.4% MoM (vs. -0.2% expected) with capacity utilisation dropping to 75.5% from 75.9%. The manufacturing data was a mixed bag. Empire manufacturing for this month did improve just over 2pts but not as much as hoped (-2 vs. -1 expected). Manufacturing production in August was softer than expected (- 0.4% MoM vs. -0.3% expected) however the Philly Fed manufacturing survey bounced an impressive 10.8pts to 12.8 (vs. 1.0 expected). On the inflation front headline PPI (0.0% MoM vs. +0.1% expected) was unchanged last month. Finally initial jobless claims (+1k to 260k) and business inventories (0.0% MoM vs. +0.1% expected) were non events.

Friday 16 September

  • In the US, the core CPI for August showed a MoM increase of 0.3%, beating expectation of 0.2%, which takes the YoY CPI to 2.3% compare to 2.2% forecast.

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