Event - The "Atomic" August NFP - What to expect?

Ladies and Gentlemen,

Today at 13.30 BST we have a plethora of data from the US, as we are all aware the Fed is “Data Dependent”.

13.30     Non-Farm Payrolls          

Average Hourly earnings

Unemployment Rate

Labor Force participant rate

The Non-Farm Payroll number will be where we look first. The market consensus is 225k. The barometer appears to be 200k with a weaker number suggesting that a rate rise in September will be off the table, whilst a strong number will make the voting members of the Federal Reserve do some soul searching.

Fed Funds has 19 basis points priced into the September Contract, 32 basis points priced in December Contract and a year from now it has 70 basis points,will this change?

The minutes of the last meeting teased the market with the word ‘some’, stating that the FED would like to see “some improvements” in data before raising rates

Dennis Lockhart, the Atlanta Fed President, a dove, said that it would take a significant deterioration in the data not to move in September.

We eagerly await the data dependent sequence…

Good Luck

Anish S. Lal @anish8fx

FX & Precious Metals, Atom8 Financial Services LLP

2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK

T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com

Bank of England's Super Thursday

Ladies and Gentlemen,

If you look at the list of data being released tomorrow in the UK, you will see why the media are referring to it as ‘Super GBP Thursday’.

09:00     New Car Registrations

09:30     Industrial Production

                Manufacturing Production

12:00     Bank of England Inflation Report and Minutes to the meeting

                Bank of England Bank rate (0.5%)

We get 3 data points from the BOE at midday, the minutes of its policy meeting, the quarterly inflation report forecast and the Interest rate decision, presently 0.5%.

Normally, these reports are on separate days.

 What should we be looking out for?

How the members of the MPC vote, the last 7 meetings have been 9-0. Are there any dissenters in the ranks?

Martin Weale confirmed he was one of two members that nearly voted for rate rise at the last meeting and JP Morgan have forecast a 6-3 vote.

Who are the other possible dissenters? Kristin Forbes said there will be a rate rise ‘in the not too distant future’.

However I take note from the BOE chief economist  Andrew Haldane ‘ For me the combination of a healing economy, very low price pressures and a wobbly world means there is no rush to move rates from where they are now’. It is important to remember that the BOE mandate is to deliver price stability and then support growth and employment.

It will a very interesting day as the market presently expects a rate rise in May of next year, if the hawks win then 1.5680 is the level to watch whilst a leaning towards the doves would see 1.5470 tested.

Good Luck

Anish S. Lal @anish8fx

FX & Precious Metals, Atom8 Financial Services LLP

2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK

T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com

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Is the Australian Economy losing its shine?

Is the Australian economy losing its shine? The flippant answer is look at their cricket team, not the dominant force they once were J

However the more considered answer is that the economic slide is partly due to circumstances beyond the government’s control.

Commodity prices have fallen, the Australian economy has been based around mining and commodities so a period of adjustment is to be expected.

Event Risk - RBA Announcement (4th August 05:30)

What impact will lower interest rates have and is this tool the answer?

Lower interest rates are fuelling ‘Asset Bubbles’.

This is a global story but the Sydney Housing market is the extreme, up a staggering 18.4% (yoy) whilst economic growth has not reached over 3%

So why reduce rates further?

The currency is 35% lower over 4 years surely this should help exporters however the jobless rate is still stuck around 6% and business confidence surveys are not at the level the government would like. A cut is the short term fix but there is a longer term issue.

The cash rate is at 2% and very few expect a cut to 1.75% (25 out of 28 economists polled by Bloomberg have rates on hold.)

We get the quarterly monetary policy statement on Friday the last two times the Reserve Bank Board members meet before this statement they cut 25 basis points

As the proverb goes being forewarned is forearmed.

Anish S. Lal @anish8fx

FX & Precious Metals, Atom8 Financial Services LLP

2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK

T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com