Marcus Ashworth – Head of fixed income at Haitong Securities – joined Nick Batsford in the Tip TV studio to discuss how last week NFP figure might affect the decision on a US interest rate hike, and whether the emissions scandal from Volkswagen (XETRA:VOWG) could have wider implications.
Are we reading too much into one number?
With the non-farm payroll figure released last week well below almost every prediction made, expectations of a 2015 rate hike seem to have evaporated over the weekend. Ashworth questions whether the market is putting too much weight on one number, despite other figures also looking innocuous, but he does mention that the Fed’s attempt at forward guidance may have ultimately force them to raise rates by the end of the year.
Merkel weighs in on VW.
Angela Merkel has urged that Volkswagen investigate the recent emissions scandal around their diesel cars, and Batsford questioned whether this will have a knock-on effect. Ashworth believes that if consumers begin to return their cars en masse, there could be a damaging effect on the car market as a whole.