Indicators for Wednesday, 21 Aug The UK starts off the day with the Public Sector Net Borrowing. The consensus is GBP -5.0bn for July (i.e., a repayment) vs an actual of GBP +10.2bn in June. Later, the CBI announces its Manufacturers’ Trends survey. Total orders are expected to improve slightly to -8 in August from -12 in July. In the US, existing home sales for July are forecast at a 5.15mn annual pace or up 1.4% from 5.08mn in June (which was down 1.2% mom). There have been a number of breathless stories in the press about sharp rises in house prices in the US, for example a house in Las Vegas selling in mid-July for double the price it had sold for three months earlier, and a similar story about a house in Phoenix, Arizona up 83% from March. One of the reasons for the sharp rise in house prices is that laws passed in the wake of illegal foreclosures have caused foreclosures to come to a near halt in some places, which of course sharply reduces the number of existing homes for sale. Then comes the big item for the day: the Fed releases the minutes from its July 30-31st FOMC meeting. This will provide details of the discussion that led all the Fed officials to such strong conviction that September will see the start of “tapering.” I expect the minutes to reaffirm this conclusion and hence send US rates up higher and EM currencies lower once again. Finally, while you are busy ravelling up the knitted sleeve of care, China may well unravel your short AUD/USD position with the HSBC/Markit flash manufacturing PMI for August. While not the official PMI, this one is closely watched. It’s expected to rise to 48.2 from 47.7, which would still be showing a contraction in manufacturing albeit less of one. (The final version comes out on 4 Sep.) This is just the first of the day’s PMIs. But we’ll deal with the other ones tomorrow.
Posted on: Wed, 21 Aug 2013 07:09:07 +0000
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