The main release from the US yesterday was the inflation data for August. It had been expected to fall from 2.9% in July to 2.8%, but it actually came in at 2.7%. As the lowest reading in four months, inflationary pressures are clearly easing and the dollar duly slumped against a basket of currencies. Investors are concerned that the Federal Reserve might ease its hawkish stance on the back of the release, and interest rates could be kept on hold for longer than previously thought.
Initial jobless claims once again beat expectations by decreasing by 1,000 to 204,000 up to 8 September 2018. It is the lowest level for initial claims since 6 December 1969 and is further evidence that the US job market is in an extended period of rude health. However, attention was diverted towards trade talks between the US and China, as Trump decided to send a tweet suggesting that America is under no pressure to make a deal. He said that they will soon be taking in billions in tariffs. He had previously tweeted that 3,000 people did not die in the two hurricanes that hit Puerto Rico and that the Democrats had inflated the figures.
Today, we will see retail sales for August which are expected to dip a little to 0.4% and we will also see industrial and manufacturing production figures. The University of Michigan will release its consumer sentiment reading to cap off a fairly hectic week.
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