US equities are in the red this morning but still positioned for a gain on the week, with trading volumes fairly subdued. As of writing, the DJIA is down 0.26%, the S&P500 is off 0.50% and the Nasdaq is down 0.57%.
The September University of Michigan confidence index fell to 85.7 from 91.9 in August after weeks of turmoil in global financial markets. The current conditions index also fell lower, but remains above 100. August PPI inflation was flattish, with growth rates lower after July's +0.2% gain. Producer inflation is likely to remain muted in the near term after a report on Thursday showed import prices fell 1.8% in August. The Euro is creeping higher again today, with EUR/USD testing above 1.1300 today.
WTI crude is down 1.6% on the day, dropping to $44.40. Energy sector participants are focused on a big call from Goldman Sachs after the firm published a report asserting that WTI could drop to $20 before moving higher. Goldman cites the huge surplus from buoyant supply and weaker demand, and claims the market is even more oversupplied than expected with the surplus likely to persist in 2016 on further OPEC production growth, resilient non-OPEC supply and slowing demand growth. Brent is down nearly 3% on the day, trading around $47.40.
The Central Bank of Russia paused its ongoing campaign of interest cuts, leaving rates on hold at 11%. This was the first time it didn't cut rates this year after lowering at the five prior meetings. With oil prices scraping bottom and the ruble losing ground again, there are clearly fears about inflation in Moscow. Russia Central Bank Chief Nabiullina said rates were being kept steady to help achieve the bank's 2017 CPI target of 4.0%. USD/RUB was around 68.20, not far from recent highs around 71.20 seen in late August.
Looking Ahead
- 12:00 (IS) Iceland Aug International Reserves (ISK): No est v 620B prior
- 12:00 USDA World Agricultural Supply and Demand Estimates (WASDE) Crop Report
- 13:00 (US) Weekly Baker Hughes Rig Count
- 14:00 (US) Aug Monthly Budget Statement: -$77.5Be v -$ prior
- 15:00 (AR) Argentina Aug National Urban CPI M/M: 1.1%e v 1.3% prior; Y/Y: 14.5%e v 14.8% prior
- 15:00 (AR) Argentina Aug Wholesale Price Index M/M: No est v 1.4% prior; Y/Y: No est v 13.5% prior
Economic Data
- (MY) Malaysia Central Bank (BNM) left its Overnight Policy Rate at 3.25%, as expected
- (RU) Russia Central Bank (CBR) left its 1-week Deposit Rate unchanged at 11.00%
- (IN) India Weekly Forex Reserves w/e Sept 4th $349.0B v $351.9B prior
- (IN) India July Industrial Production Y/Y: 4.2% v 3.6%e
- (US) Aug PPI Final Demand M/M: 0.0% v -0.1%e; Y/Y: -0.8% v -0.9%e
- (US) Aug PPI Ex Food and Energy M/M: 0.3% v 0.1%e; Y/Y: 0.9% v 0.7%e
- (US) Aug Ex Food, Energy, Trade M/M: 0.1% v 0.1%e; Y/Y: 0.7% v 0.7%e
- (MX) Mexico July Industrial Production M/M: +0.2% v -0.1%e; Y/Y: 0.7% v 0.5%e
- (US) Sept Preliminary University of Michigan Confidence: 85.7 v 91.2e
[I]Contributed by Trade The News[/I]
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