Why Investors Should Track Capacity Utilization
As per the Industrial Production and Capacity Utilization report published by the Federal Reserve, the total industry capacity utilization has risen to 76% in September as compared to 75.8% in August.
The Federal Reserve released its September industrial production report on October 17. The report indicated that key sectors in the US economy increased production in September.
The Japanese yen (JYN) managed to close higher against the US dollar after posting four consecutive weekly losses.
The British Pound (FXB) appreciated by more than 2% against the US dollar last week. The pound (GBB) closed for the week at 1.3288, appreciating by 1.69% against the US dollar (UUP).
The euro-dollar (FXE) pair closed the week ending October 13 at 1.1822 against the US dollar (UUP). The shared currency managed to rebound from an 11-week low the week before, affected by political turmoil in Spain.
US bond markets (BND) saw some recovery last week. Overheated expectations for a December rate hike cooled off after the FOMC meeting minutes were reported.
The US Dollar Index (UUP) turned lower again in last week after a surprise rally following the October jobs report on October 6.
For the week ending October 13, the S&P 500 index (SPY) closed at 2,553, recording gains of 0.15%. The S&P 500 Index has appreciated in six out of the last eight weeks.
President Trump’s executive order on healthcare, the Iran nuclear agreement, and news about North Korea preparing for a launch ahead of US–South Korea military exercises failed to trigger higher volatility.
FOMC members noted that labor market conditions could take a hit due to the hurricanes in August and that this was evident in the October non-farm payrolls report.
Not all members of the FOMC, according to the minutes of the meeting, were on the same page with respect to a December interest rate hike.
The September meeting minutes indicated that the members underscored that the reduction in the Fed’s balance sheet would be gradual.
In this series, we’ll discuss the September FOMC meeting minutes in detail and decide how the meeting minutes have changed the outlook for markets.
The Job Openings and Labor Turnover Survey is a forward indicator of economic activity. The US Fed takes this measure into consideration when making monetary policy decisions involving interest rates.
The Japanese yen (JYN) depreciated for the fourth week in a row last week.
The British pound (FXB) depreciated more than 2.0% against the US dollar for the week ended October 6, 2017.
It’s possible that political pressures could keep the euro under pressure as the economic calendar remains light in the Eurozone.
Bond traders have few reasons to be happy this week. Chances for tax reforms continue to increase with the US Senate moving on a path that would mean only 51 votes could be required to pass the bill.
The US Dollar Index (UUP) closed at 93.64 last week, a gain of 0.82% and the fourth consecutive weekly rise. The dollar didn’t react to a loss of 33,000 jobs in September.
For the week ended October 6, 2017, the S&P 500 index (SPY) closed at 2,519.36, recording gains of 0.80% for the week and the sixth straight record close.