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Currencies

Strong German economy lifts Euro

All sectors of the German economy grew in the second quarter, data showed, with robust domestic activity helping to cushion against risks to exports from an uncertain global trade outlook. Construction and state spending expanded the most, both up 0.6 per cent quarter on quarter. Private consumption extended its growth run to six straight quarters, reflecting steady falls in unemployment during what has been a long phase of economic recovery. Turkish crisis seems to be calming down a bit, attention is starting to focus on other things, such as the risk appetite. That should lift the Euro overall.

A consortium composed of Novus Aviation Capital, Development Bank of Japan Inc., NORD/LB Norddeutsche Landesbank and The Boeing Company has launched Cedar Aviation Finance (CAF), a new junior debt fund designed to provide airlines and lessors with higher loan-to-value financing for the acquisition of Boeing manufactured aircraft. The fund will be managed by Novus and will provide junior and mezzanine loans to bridge the gap between equity and senior debt.

Commodities remain under pressure from uncertainty surrounding the US’ trade dispute with the rest of the world and the continued weakness seen across emerging market stocks, bonds, and currency markets. These developments have resulted in the Bloomberg Commodity Index losing close to 9% since its early June peak while sending it towards its lowest weekly close in more than a year.

Currencies

Upbeat NFP report supports USD

American wages climbed in August by the most since the recession ended in 2009 and hiring rose by more than forecast, keeping the Federal Reserve on track to lift interest rates this month and making another hike in December more likely. Average hourly earnings for private workers increased 2.9 percent from a year earlier exceeding all estimates and the median projection for 2.7 percent.

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