U.S. Dollar quiet, markets uneasy about Delta effects

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U.S. Dollar quiet, markets uneasy about Delta effects

SEPTEMBER 15, 2021

The U.S. Dollar is basically flat in comparison to yesterday’s ranges with global markets still digesting the potential for more regulations from the Chinese government on large companies. 

Overview

Stocks in the U.S. remain elevated and around record highs, but the rest of the exchanges, in particular, the European Stoxx Europe 600 are down as large companies such as H&M missed sales estimates. Asian trading sessions have also been in the red especially after China’s output reports showed declines. Indeed, a slowed economy in China because of Delta and restrictions is translating into a global step backward.

On the domestic data front, Import Prices for August contracted instead of expanding, however, the regional survey in the form of Empire Manufacturing came in at a higher reading than expected, double the estimate, which speaks of confidence in some areas. We will get Industrial Production at 9:15 AM. There will be far more to chew in terms of numbers the next two days.

What to Watch Today…

  • No major economic events scheduled for today

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EUR  

The Euro also lacks enthusiasm behind it following Consumer Price Data that indicated expansion in France and industrial Production for the Euro-zone as a whole. Nevertheless, it feels the globe is in the midst of trouble it just cannot shake off, thus lack of confidence and conviction for investors and traders. We shall see how stocks do since European discount on stocks keeps widening with the U.S. There could be commentary from European Central Bank figures, such as Chief Economist Philip Lane, that could further add doubt to the continent’s ability to keep a steady recovery going.

GBP  

Sterling is being lifted by inflationary growth figures out of the U.K. that put the CPI annual average at a level not seen since March 2012. As CPI stands at 3.2%, the thinking is that the Bank of England will be able to be more hawkish and perhaps set its agenda for two interest rate hikes in 2022. A lot has to be resolved since we are not even close to being done with this pandemic, but a strong first half of the year could indeed mean action by the BOE, a boost to Pound prospects.

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