Technical & Fundamental Oil Reports Specialists

Follow us

Interest rate hike likely to be delayed

Published Thursday, August 14th, 2014

A contraction in UK wage growth and poor US retail sales were read by the market as delaying the long expected interest rate hike. It was yet another case of bad news is good news as yesterday’s slew of soft economic data bolstered hopes of continuing ultra-loose monetary policy which in turn lifted investor sentiment. The largely positive mood came as European markets were forced to digest the latest in a long line of disappointing figures as industrial output across the currency-bloc unexpectedly dropped 0.3% in June from the previous month.

A fall in French consumer prices further highlighted the risks posed to the region’s hitherto unconvincing economic recovery. The status quo looks set to continue today following this morning’s announcement that the German economy suffered a surprise contraction of 0.2% in the three months to June.

Similarly, markets in the US shrugged off weaker-than-expected data as retail sales figures unexpectedly stalled in July in what was the poorest report since January of this year. Although business inventories recorded a modest gain in June, the overall dovish outlook was maintained with investors hoping the Fed would keep interest rates down for longer. The upshot saw the Dow and S&P adding 0.6% and 0.7% respectively as global equity markets ticked higher.

to read the rest of the report, please click here 

Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.