Following an unpredictable August, that saw heightened volatility throughout the markets, Darren Sinden – Market commentator for Admiral Markets – joined Nick Batsford and Zak Mir on Tip TV to discuss the good, the bad, and what questions remain unanswered.
The US is ready for a rate hike.
The American economy seems to be largely on track, having seen a further fall in unemployment, and a higher revised GDP estimate up to 3.7% for the year. They are also relatively unexposed to risk from China, as Sinden points out only 2% of the S&P 500 2014 revenue came from China. As the Dollar begins to show signs of weakening, the pressure will be eased on emerging markets, and the Federal Reserve will be able to comfortably increase interest rates.
Slowing growth in China puts pressure on Japan.
After the G20 meeting this weekend, the IMF stated that the economic slowdown in China will have a global impact. This can already be seen in parts Asia, where other countries are also weakening. Japanese GDP fell by 1.2% between April and June due to soft export figures and weak domestic demand says Sinden. With 2015’s gains on the Nikkei now erased, further slowing in China could potentially force Japan’s hand over their currency.
