Today’s session remains subdued so for as markets in Europe trade mixed after FOMC decision on the Wednesday evening. The US dollar still licks its wounds as the currency has hit its lowest level in more than 2 years on dovish message from the Federal Reserve.
While the Fed said it expected to start shrinking its massive holdings of bonds “relatively soon”, a phrase taken by many to mean an announcement in September, the central bank also noted weakness in U.S. inflation more explicitly than before. That recognition of soft inflation from the Fed, which had in the past judged the weakness as transitory, added to expectations that the Fed’s plan to raise interest rates a third time this year might be delayed.
As the earnings season is blooming, Deutsche Bourse (DB1.DE) got a hit from the latest reports, declines almost 4 percent in Thursdays session. The company reported yesterday that its consolidated net profit for Q2 declined to 176.3m EUR from 183.5m EUR in the prior year. In turn, EPS slipped from 0.98 EUR to 0.94 EUR seen last year. The firm’s CEO said that “even though business development was slightly below our expectations, from out point of view it’s still possible to achieve the lower end of out earnings forecast for the full year”.
In currency sector, SEK could come under pressure as Swedish government reshuffled. As a result of a political disruption, Swedish PM decided to hold a press conference earlier today. He chose to reshuffle his government in response to demands from the opposition that no-confidence votes are cast against three of his ministers who may have put classified information into the hands of foreign powers.
At 1:30 we will acknowledge US durable goods where economists are looking for a solid 3.5% monthly advance in new orders, the first increase in three months and the strongest rise since last October. Survey data for July hints at the potential for an acceleration in orders. This month’s flash reading of the US Manufacturing PMI ticked up to 53.4, a four-month high that signals a moderate pace of economic activity for the sector.