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China needs a plan B, Fed rate hike remains data

Nick “Moose” Batsford, CEO of Tip TV, opened the Tip TV Finance show today on Tuesday 18th August, alongside technical analyst Zak Mir from ShareProphets.com and chief market analyst from eToro James Hughes, to discuss the main headlines including China and rates.


China to cause problems for the Fed and for oil

Mir highlighted the People’s Bank of China, where he questioned the structure and effectiveness, with only one banker on the policy committee. This led to Hughes’ comment that China is a main issue for the Fed, along with oil, and he reinforces his belief of a 2016 rate hike. He continued that China will also have an effect on oil, with their demand falling with the weakening economy, whilst Mir finished the section by noting that China needs to come up with a plan B.

The New York area Empire Manufacturing Survey

Batsford outlined that the survey had slumped to minus 14.92 in August from a positive 3.86 in July, which was also the lowest reading since March 2009. With Ms Yellen having informed us the US rate hike would be data dependent, Batsford could therefore comment that the rate hike could be put on hold with this data, depending on this week’s release of the US CPI and FOMC minutes.

Gold and the FTSE 100

Mir noted that gold is looking a little better with China reminding people that currencies aren’t as reliable, and thus we saw gold rally to March support. When concerning the FTSE 100, Mir commented that the 6515 support area looks like it is holding, but he adds to wait for the range to break, whilst Hughes mentioned that the FTSE 100 is grim, with the potential to be very grim.


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