Five Things Markets Will Focus On Today

Division at the Federal Reserve, Chinese deflation risks and the U.K. jobless rate at its lowest since 2008. Here are some of the things people in markets are talking about today.

1. Fed division

Federal Reserve Governor Daniel Tarullo has added to division at the central bank, saying that he doesn’t currently favor raising rates in 2015, echoing comments from fellow-Governor Lael Brainard on Monday. Though the comments from the two governors put them at odds with Fed Chair Janet Yellen, the market agrees with them as market-based indicators put the chances of a rate rise this year at less than 35 percent.

2. Chinese deflation risks

Consumer inflation increased 1.6 percent in September, down from 2 percent in August and below a 1.8 percent median estimate in a Bloomberg survey. China’s producer-price index fell 5.9 percent, extending its streak of negative readings to 43 months. The Shanghai Composite Index ended the session 0.9 percent lower, and the yuan extended yesterday’s drop against the dollar.

3. U.K. unemployment

Unemployment in the U.K. has unexpectedly dropped to 5.4 percent, the lowest level since mid-2008. Wage growth excluding bonuses slowed to 2.8 percent from 2.9 percent. With inflation falling into negative territory, real wage growth in the U.K. is the highest it has been since before the financial crisis.

4. Democratic candidates debate Wall Street

In yesterday’s Democratic candidate debate leading contenders Bernie Sanders and Hillary Clinton clashed over who had the tougher plan to rein in Wall Street, with Sanders promising more taxes for the rich and Clinton proposing jail terms for executives, if needed.

5. Coming up…

Retail sales data for the U.S. will be released at 8:30 a.m. ET, with strong September auto sales data leading to expectations of 0.2 percent headline growth. Excluding auto and gas, retail sales are expected to rise 0.3 percent. Following from JPMorgan results after the bell yesterday, Bank of America reports at 7:00 a.m. ET and Wells Fargo reports at 8:00 a.m. ET

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell