DAX: Stuck on trend line resistance but retreating from 38 per cent Fibonacci retracement resistance. Chart/Levels from Analyst, Nicole Elliott – Investors Chronicle.

 

Central banks should be ‘data dependent’ Take a look at UK and US numbers yesterday

Yesterday morning the Confederation of British Industry published its August distributive trades survey; it was very negative indeed. From July’s -16 reading, it slumped to -49, retail sales collapsing at the fastest rate since December 2008’s -55 record low. For a series going back to 1984, previous bearish readings in the 1990’s were no lower than -11 and in the 2000’s -13. In the US August Markit sentiment readings, with a far shorter history, saw the manufacturing sector move into contraction at 49.9 for the first time since the financial crisis, services slip from 53.0 to 50.9 and the composite from 52.6 to 50.9 also.

Yesterday Indonesia’s central bank trimmed its key rate by 25 basis points to 5.5 per cent, a surprise to many. Governor Perry Warjiyo told CNBC ‘’this is a pre-emptive move to support our growth momentum and to anticipate the possibility of downward risks on the global economic outlook’’. He also suggested there may be more cuts in the pipeline, here and in other Asian countries, as Indonesian inflation should remain within its target range of 2.5 to 4.5 per cent per annum.

Financial Markets and Political Commentary
 

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