The Traders’s Journal

• Interest rates - remain at 4.75%. The next MPC decision will be on October 6.
• CPI - remains at 2.5%. The next inflation report will be on October 17.
• Consumer Confidence - remains at -8 . The next consumer confidence report will be on September 29.
• UK Manufacturers are worried about higher energy prices, having seen their costs jump by at least 30% in the last year
• UK personal unsecured debt is almost twice that of other Western European economies, with the average person owing £3,175.

• PPI - The August Producer Price Index rose just 0.1%, as the amount spent by businesses on energy moderated after recent jumps.
• Wholesale energy prices rose 0.3% in August after a jump of 1.3% in July.
• House construction falls by 6%.
• GDP grew by an annual rate of 2.9% in Q2 (versus initial estimates of 2.5%) compared to 5.6% in Q1.

• Productivity - Fed Reserve Chairman Bernanke said strong growth in US productivity will probably go on for some time as companies and industries make better use of computers to raise workers per hour output.
• Unemployment - US employers added 128,000 jobs in August, a sign that whilst the economy is still growing, the rate of growth may be slowing.
• Housing Market slows - house prices grew at the slowest rate in 30yrs in the 2nd quarter , further evidence of a cooling house market.

• Fed minutes - FOMC minutes released yesterday indicated that the Fed was unlikely to raise interest rates (currently 5.25%) in either September or October.
• Hurrcane Season - Ernesto loses strength and veers away from oil and gas fields in Gulf of Mexico.
• Crude oil - oil price closed below $70 as a result, but moved back up due to fears over Iran
• Consumer Confidence - fell to a 9 month low
• Housing Market slows

• Fed releases minutes August 29
  • After the last Fed meeting, interest rates were held at 5.25%, ending an unbroken series of rises that began in June 2004.
  • The markets are eagerly awaiting to see what was discussed during the meeting This was evident yesterday when comments by Chicago Fed Reserve President Michael Moskow caused the US markets to drop after a good rally.
• Crude oil - after finding support at $70, oil bounced and started to rally strongly. However, last night oil prices edged lower after calls by Iran for talks to resolve it\’s nuclear standoff calmed traders nerves.
• Hurrcane Season - the markets are bracing themselves for another above average hurricane season. The hurricane season\’s peak period started a wek ago and will run through October. It is feared another hurricane such as Katrina may hit causing more damage to the oil and gas production in the Gulf and hurting the economy. Katrina caused an estimated $81b in damage.

• CPI
  • The Us Government’s Consumer Price Index (CPI) rose 0.4% in July ,in line with analysts expectations, and up from a rise in June of 0.2%.
• US House Market
  • The National Association of Homebuliders index of sentiment fell seven points to 23 in July, it’s lowest level since February 1991.
• Commodities
  • Oil - prices edged lower in cautious trade ahead of the release of the latest US weekly inventories data which is expected to show a fall in crude and gasoline stocks.
  • Metals
    • Nickel continued to trade just below record levels of $27,700 a tonne where global inventories have shrunk to crucial levels of less than one day’s worth of world consumption
    • Copper trading at $7,695 with strike action ongoing at Escondida, world’s largest mine in Chile.
    • Gold traded at $626/ounce. Gold has been under pressure recently from the easing of tensions in the Middle East with the ceasefire betwen Israel and Hezbollah holding for a third day.

• Fed holds rates for first time in 2 years
  • After Tuesday’s Fed meeting, interest rates were held at 5.25%, ending an unbroken series of rises that began in June 2004.
  • At the meeting it was noted that “some inflation risks remain”, leaving open the extent and timing of any additional firming. This suggests that the Fed retains a tightening bias and it is more likely that it’s next move will be up.
• Crude oil has eased back from the highs reached on Monday following BP’s decision to shut down the giant Prudhoe Bay oilfield in Alaska.
• Copper prices broke through the $8,000 per tonne mark on Monday as industrial action began at Chile’s Escondida mine.
• US unemployment rose last month for the first time this year - further evidence that the economy is slowing .
  • This was one of the many economic indicators used by the Fed in deciding to keep interest rates on hold

• Middle East conflict continues
• US economy slows ; worries develop over impact of benefits on economic growth
• Japanese land prices rise
• Oil prices back up to over $75 per barrel
• Gold prices rise as a hedge