Daily Market Report 12/08/15

GBP
MPC member David Miles stated that he almost voted yes to raising UK interest
rates last week.  He stated that there was a reasonable case for starting
a gradual rate rise to avoid more rapid and impulsive rise in the future.
 Ian McCafferty voted for a rate rise but David Miles comment is an
indication of the shifting balance. He chose to vote for a hold on rate rise as
a result of the  economic news that reduced the near term inflation

GBP
MPC member David Miles stated that he almost voted yes to raising UK interest
rates last week.  He stated that there was a reasonable case for starting
a gradual rate rise to avoid more rapid and impulsive rise in the future.
 Ian McCafferty voted for a rate rise but David Miles comment is an
indication of the shifting balance. He chose to vote for a hold on rate rise as
a result of the  economic news that reduced the near term inflation
profile such as low Oil prices and a weak Eurozone economy. 

EUR
The European commission reports that Greece has reached a technical agreement
with its creditors which now requires parliamentary approval.  The Greek
government is now looking to put an Euro 85 billion (£60 billion) three year
agreement through parliament this week.  The country need to reach a deal
by the 20th of Aug when it has to pay Euros 3 billion to the European Central
Bank.  The parties involved in the deal agreement were the IMF, the ECB,
and the European Stability Mechanism.

A new independent privatization fund, deregulation of the natural gas market in
2018, a review of Greek social welfare system with the aim of cutting
expenditure, and how the non performing bank loans will be administered were
also agreed. However an early retirement program and plans to gradually
increase the pension age to 67 by 2022 were not confirmed by EU officials.
 Euro-zone finance ministers are to meet on Friday to discuss approval of
the deal.

USD
Fed chairman vice chairman Stanley Fischer stated that the fed faces a dilema
in deciding when to raise interest rate with the US economy in full employment
which warrants higher interest rates but very low inflation still a stumbling
block.  the Feds next rate decision is on Sept 16-17.

Second quarter non farm productivity bounces back coming out at 1.3% beating
the estimated 1.6%.  This suggests that inflation could pick up much
faster that many economists are anticipating. The quarterly preliminary labour
costs also beat estimates of 0%, coming out at 0.5%.

 

Key
Announcements:

10:00- GBP: UK ILO Unemployment rate (July) expected to remain
unchanged at 5.6%.