Daily Market Report 10/09/15

Manufacturing production fell unexpectedly throughout July as did the UK’s industrial output. Manufacturing production decreased by a seasonally adjusted 0.8% in July. It was expected to gain 0.2% following a previous 0.2% increase earlier this year.  Annually  manufacturing production fell at a rate of 0.5%.

The U.K’s good trade deficit widened more than expected in July. The country’s goods trade deficit rose to a £11.08 billion from £8.51 billion in June. It was expected to widen to £9.5 billion in July. The total trade deficit widened to GBP 3.4 billion and the NIESR GDP Estimate came in at 0.5% with the previous being 0.7%.

Applications for U.S. home mortgages fell last week. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity fell 6.2 percent at the end of last week. Job openings rose throughout July, beating analyst estimates to reach a new record high.

The MBA's seasonally adjusted index of refinancing applications fell 9.9 percent, while loan requests for home purchases dropped 0.9 percent. Job openings climbed to 5.75 million in this month. 

Today is a big day for the Pound with the announcement of the Bank of England’s Interest rate decision at 1200 midday London time. The last vote showed 8 votes for unchanged rates with 1 vote for a hike. Today the risk is for all 9 votes to opt for unchanged, which could affect the Pound’s strength. 

The BoE will also release minutes from their meeting in August, which could release further clues as to when they do or do not intend to raise the BoE Base Rate. Risk is for any rhetoric released to be Sterling negative, after Governor Mark Carney has already made statements citing that the slowdown in China may have negative implications for UK inflation going forward.


Key Announcements

GBP - BoE Monetary Policy Statement
GBP -12:00: BoE Interest Rate Decision (Sep10) – Expected to stay the same at 0.5%
GBP - 12:00:  BOE MPC Vote Unchanged – Expected to stay the same at 8-1 to keep rates at 0.5%
USD - 13:30 Continuing Jobless Claims (Aug 28) Expected to fall to 2.250M from 2.257M.