BT Three Minute Markets Update

Haven't done this for a while but markets have done what they should while I was away, if a bit pessimistic... The daily movements: FTSE +0.3% DAX +0.6%, S&P & DOW +0.1% as central banks expected to have success in what they're doing, and the US housing data was generally positive.

NAHB home building confidence index highest since June 2006 at 40, up from 37 with concensus expecting 38; US Q2 current account balance saw the deficit narrow to $117.4bn (3% GDP), down from $133.6bn (3.5% GDP).

September Empire manufacturing activity report: after -5.8 in August, concensus was for it to be flat but the actual was -10.41.

US August CPI report bang on concensus +0.6%, highest in 3 years, but core services saw airline fares down again, both driven by the rise in petrol prices.

July wholesale inventories, after being -0.2% in June, concensus was for +0.3-0.4%, actual was +0.7%. Highest level for 5 months with sales declining; expectation is for production to decline.

US July trade balance: the deficit widened for the first time in four months - up to $42bn. Imports declined however, due to the fall in crude oil.

July consumer credit contracted for the 1st time in a year concensus $9.2bn, actual -$3.3bn - due mostly to non-revolving credit.

Aug employment report: consensus was +140,000 non-farm payroll and umemployment rate steady at 8.3%; actual was +96,000 and unemployment down to 8.1%, due to 368,000 leaving the workforce. So will Bernanke decide to apply QE this week, or use other initiatives?

August Services ISM concensus expecting 52.6, same as July, actual 53.7, but some sub-indices were poor. Employment reports generally unchanged or slightly positive, contrary to expectations.

Quarter two productivity growth revised upwards from 1.6% to 2.2%, now comfortably above consensus' 1.8%, which dovetails in rather well with GDP growth during the second quarter, revised up to 1.7% from 1.5%.

August ISM: June was 49.7, July 49.8; consensus expected 50.0 but actual was 49.6 - lowest since July 2009 and first sub-50 print for three consecutive month since May-July 2009.

Univerity of Michigan consumer sentiment index revised up from 73.6 to 74.3; purchasing manager index reversed all of July's gains (53.7 in July, consensus expecting 53.2 but August actual was 53.0); Fed might consider extending to low cash rate out to 2015.

Initial jobless claims remains steady, higher than concensus and the three-week average climbed. Personal income has risen for eight months in a row.

August Beige Book saw employment holding steady and improvements in building - including commercial - and slightly improved spending; 2nd Quarter GDP 1.5% revised up to 1.7%, as per consensus.

June's Case-Shiller index showed a +0.94% house price increase, double the consensus, with 18/20 metropolitan areas showing an increase.