Equities are still in demand this morning as investors keep buying into the market in light of the cooling political tensions surrounding North Korea. The stalemate between the US and North Korea is still ongoing, but as we are seeing diplomacy being implemented rather than military action, traders are taking on more risk and snapping up stocks.
Sterling was given a boost after the UK released a strong set of jobs and earnings data. The unemployment rate dropped to 4.4% and average earnings excluding bonuses ticked up to 2.1%. The claimant count dropped too. It was an all-round impressive set of figures, and the pound will be in good stead because of it.
The euro took a knock after it was announced the European Central Bank President, Mario Draghi, will not be using his speech at the Jackson Hole Symposium to lay the ground work for a change in the stimulus package. Traders have been speculating for some time that Mr Draghi would use the speech as an opportunity to talk about trimming the ECB’s €60 billion per month bond buying scheme, and now it appears that it will not be the case.
The EUR/USD and EUR/GBP have been pushing higher for a number of months in anticipation of a tapering of the bond buying package, and now we are seeing dealers dumping the single currency.
The energy information agency (EIA) will reveal the oil inventory figures at 3.30pm, and traders are anticipating a decline of 3.1 million barrels, and that compares with last week’s drop of 6.45 million barrels. WTI and Brent Crude oil have been creeping higher this morning.
We are anticipating the Dow Jones to open 52 points higher at 22,050, and we are calling the S&P 500 up 6 at 2470.
At 1.30pm, the US will announce July’s housing starts and building permits numbers, and the consensus is for 1.22 million and 1.25 million respectively.
Target Corporation (NYSE:TGT) and Cisco Systems Inc (NASDAQ:CSCO) will announce their quarterly results today.
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