Afternoon Update – by- Michael Oyebamiji
February 17, 2016Japanese economy continues to show some further signs of economic recession. Core Machinery orders figure released last night missed expectation at -3.6% which is the lowest in almost a year. This obviously remains a concern over the state of Japanese economy especially considering the fact that GDP (Q4) also missed expectation. Maybe, it’s time to revisit Abenomics.
Earlier this morning, we received some economic data from the UK which has given some strength to the GBP. It will be recalled that GBP sold off massively yesterday on the back of Brexit fear. This morning we have seen GBP trying to recover some losses, thanks to the good data. Claimant count change came stronger than expected at -14,800, Average earning at 2.0%, unemployment remains at 5.1%.
Later today, the FOMC meeting minutes will be released. The minute is expected to shed light on the current state of the US economy and most importantly some external factors from overseas which is affecting the global economy. The major external factor remains China. The month of January has seen a massive sell-off in the global equity market and as a matter of fact, all major stock markets are now in a bear market. The collapse of the oil price is another factor which is weighing on the global economy and most importantly inflation targets. The FED is targeting 2% inflation level but right now the US economy is till far from it. The minutes is expected to further highlight that FED remains data dependent regarding raising rates in the next meeting.
