Market Action

• Utilities were once again a leading sector in U.S. equity markets this week as stocks delivered weak results. With the 10-Year treasury yield once again dipping below 2.2% investors sought out the high dividends offered by utilities.
• Employment data for the month of July came in slightly below expectations this week according to ADP and government sources. The slight miss was not alarming to analysts and economists who are projecting Q2 GDP growth to be revised up towards 2.9%-3.1%.
• Fed Governors Powell and Lockhart both made headlines this week with commentary suggesting a rate increase in September is more and more likely. Fed Futures markets are projecting a roughly 50% likelihood of an increase next month.
• As markets continue to price in a rate increase in the U.S. central bankers in India and Australia held off on expected rate cuts this week. Policy makers in both countries opted to see if USD strength via Fed action would simultaneously aid their respective economies without the need for cutting rates.
• The IMF reported that further work needed to be done on capital account liberalization in order for the Renmibi to be included as part of the SDR system. Director Lagarde has said that it is a matter of “when” not “if” regarding the Renmibi’s inclusion.
• The Bank of England lowered its projections for economic growth and sounded a dovish tone at a press conference this week. The Pound hit its lowest point against the dollar in a month.
• Retail Sales and Consumer Sentiment data released next week will garner close scrutiny from market analysts. Weak numbers suggesting lack of demand in one or both indicators could have an influence on the Fed’s September meeting.

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