Sep 2, 2016 | Investment Advice

International News (Issue 415) – 2 September 2016

International News – 2 September 2016

In global markets this week, we once again are stuck in a holding pattern.

In fact, you would be amazed to know that the S&P500 has been stuck in a 2% trading range for over 6 weeks now.

Friday’s Jackson Hole speech from Fed Chairwoman Janet Yellen came and went with little fuss despite her affirmation that the ‘case for a rate-hike had strengthened in recent months’.

US interest rate markets currently only price a modest 2 x 0.25% interest-rate hikes between now and year end 2017, which seems pretty optimistic given the current employment picture in the US.

Should we see a strong US August payroll figure TONIGHT our time, I think the market likely moves to price in a US interest rate hike at the next Federal Reserve meeting on September 22nd.

A strong payrolls would also drive the Australian dollar lower and equity markets lower for the next few weeks too.

The other event of note this week which also surprisingly went by without a fuss, was the release of China’s August manufacturing data, which surprisingly jumped to its highest level in 18 months.

I’m not convinced this is the start of an improving industrial trend in China, but it was a nice surprise and a figure to watch in the months ahead.

That’s all folks!

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