Fundamental Analysis

Weekly RoundUp Report 23/10/2017

• October 23, 2017

EVENT RECAP: WEEK ENDING 20^th OCTOBER 2017   North America   Janet Yellen addressed the inexplicable "surprise" that is low inflation which has plagued policymakers for the majority of the year. The Fed Chair highlighted that weak inflation has been explainable up until this year. This phenomenon has taken place against a backdrop of improving economic data despite the Fed reducing stimulus. The Housing market also defied expectations in September. Building Permits and Housing Starts both missed expectations despite a rebound in August, with Housing Starts dropping to a one-year low.     Asia Pacific   Japanese Prime Minister Abe takes a third term in power after a landslide victory in Sunday's general election. Minister Abe has stated that his first priority is North Korea and strengthening defense capabilities amidst rising tensions between the two countries. In China, the economy grew by 6.8% during the quarter, when compared with the same period of 2016. However, the result does indicate a slowdown especially when compared with the first and second quarter of this year. In contrast, there was a rebound in industrial production which surged to 6.6% in September when compared with the previous year.   United Kingdom   Despite persistently high inflation, wage growth has been slow for workers in the U.K. However, the Average Hourly Earnings Index beat expectations growing by 2.2% for the three months ending August, yet remains off the pace when compared with wage growth for the same period last year.  Despite the growth, retail sales contracted by 0.8% for September indicating that consumers are not feeling the difference in terms of their finances.     Europe   ECB President Mario Draghi continued to highlight the need for structural reform in countries of the Eurozone, highlighting the limitations of the ECB and the requirement for parallel fiscal policies. Economic sentiment has dropped in Germany according to the ZEW Institute, which registered 17.7 points for October against expectations of a rise to 20 points.