Fundamental Analysis

Weekly Roundup Report 12/09/2017

• September 12, 2017

EVENT RECAP: WEEK ENDING 9^th SEPTEMBER 2017   North America   The headline event of the week was the unexpected interest rate hike from the Bank of Canada, raising the Overnight Rate by 25 basis points to 1%. It was expected that the bank would wait until its October monetary policy meeting to implement further tightening measures. The surprise rate hike resulted in a 'violent' reaction in the markets, which policymakers did not anticipate. Faster than forecast rate of growth fueled the decision with GDP outpacing forecasts by 1.5% in the second quarter. According to the latest Institute for Supply Management report, the Services sector has begun to slow during the third quarter. The indicator missed expectations rising to 55.3 points, however, represented an improvement on the previous month at 53.9. Most sub-sectors grew during August with a healthy rise in both business activity and new orders.     Asia Pacific   In China, inflation recovered in August beating expectations to a 1.8% rise, year-on-year. and a 0.4% rise on July's growth. Producer prices also showed steady growth over the year, again, beating expectations to a 6.3% rise in August. A narrowing of the trade surplus in August to 286.5 billion Yuan could point to slower economic growth for the second half of the year.     United Kingdom   The U.K. Construction sector slowed this summer when compared to the previous year. The sector expanded less than expected to 51.1 points in August.  Despite the slowdown in construction, manufacturing production rose in the three months ending July, according to the Office For National Statistics. The expansion was attributed to the a rise in oil and gas extraction.     Europe   ECB President Mario Draghi highlighted some improvements in global economic recovery in the September ECB Press Conference. The growth forecast for the Eurozone was revised higher to 2.2% for 2017. Inflation still remains flat with little upward pressure in prices according to the President, indicating that the bank's balance sheet will continue expanding.