Fundamental Analysis

Weekly Roundup Report 22/08/2017

• August 22, 2017

EVENT RECAP: WEEK ENDING 18^th AUGUST 2017   North America   Consumer spending in the U.S. grew at a healthy 0.5% pace for July, after two consecutive months of contraction in May and June. The housing market is still experiencing some volatility as home building fell for the month of July; against expectations of a rise of 1.25 million. As expected, the Federal Reserve kept options open for a reduction in the balance sheet at September’s F.O.M.C. meeting. However, inflation is expected to remain below the 2% target for an extended period.     Asia Pacific   Industrial production in China; a key component of economic growth, fell to 6.4% year-on-year in July. The result represents just one of a number of disappointing macroeconomic indicators for China; however, sentiment does not appear to be particularly bearish. According to the Reserve Bank of Australia, inflation is broadly in line with expectations, only slightly below the 2% target and is expected to remain at this level for the reminder of the year. The bank highlighted some spare capacity in the labour market, yet employment change far surpassed expectations with a rise of almost 28,000 new workers for the month of July.     United Kingdom   CPI has moderated slightly to 2.6% growth in July representing no change from the same period of 2016. Inflation is still well above the 2% target set by the Bank of England. Unsurprisingly, given the rate of inflation, the Average Earnings Index rose by 2.1% in the three months ending June. Consumer spending beat expectations with a rise of 0.3% in July.     Europe   There were no surprises in the Eurozone with initial estimates of CPI and GDP meeting expectations at 1.3% and 0.6% respectively.