|01:30 (Sept 12th)||AUD||NAB Business Confidence||12|
On Friday, a pessimistic sentiment emerged in the markets ahead of a weekend that will likely see the landfall of hurricane Irma, potentially the most destructive hurricane the U.S. has ever seen. There are also concerns that North Korea will test weapons test on Saturday, on the anniversary of the founding of the nation.
Asian markets were negative, Japan in particular, as the Yen reached 10-month highs versus the USD. However, in Europe, markets ended a modestly higher, with gains capped by worries over the weekend events and the increasing strength of the Euro. While French CAC40 edged lower as July industrial production was worse-than-expected, Germany’s DAX managed a gain as German imports surged higher in July, highlighting the strength of that economy. In London, the FTSE100 fell due weakening mining sector and a mixed reading on industrial production. The Pound also continued to firm against the U.S. dollar, putting further pressure on British equities.
U.S. markets finished the session mixed, with the S&P500 and Nasdaq falling due to weakness from the energy and technology sectors, while the Dow Industrials increased modestly with the help of the financial sector. Adding more pressure was the weakness of the USD, which continued falling as U.S. Treasury yields fell to a ten-month low. On a weekly basis all three of the major indices booked losses, ranging from 0.6% to 1.2%.
The pair surged higher once again Friday, gaining for the fourth session in a row. The move took the pair briefly above the 1.3200 level, but it dropped back as it found resistance there. Worse-than-expected U.K. industrial production helped keep GBP/USD below 1.3200 at the close, but it can see more gains this week as the USD is likely to struggle with U.S. Treasury yields at ten-month lows.
The London benchmark index fell as fears over North Korea and hurricane Irma weighed on investor sentiment, and a stronger Pound was a drag on equities. There was also a disappointing reading on Chinese exports released, and that news caused the mining sector to pull back. Overall, the FTSE was lower for the week, posting its first weekly loss in four weeks.