US Industrial Production likely to keep suffering from Hurricane Harvey
|Today will be released the US industrial production and is expected to increase to 0.3%m/m from a month earlier at -0.9%m/m. The greenback which has largely weakened since the start of the year is now facing upside pressures since European political worries are accelerating.
We recall that in August, the Hurricane Harvey devastated the Gulf Coast which led to the decline of industrial output. Yet, markets seem way too optimistic that industrial production will increase almost back to normal again in September. In our view, we believe that markets are a bit too optimistic. Indeed the recent ISM supplier delivery index showed that possible consequences of the Natural disaster are continuing in September.
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This will likely impact the dollar in the very short-term. We consider that we should see the Eurodollar back above 1.18. Tomorrow will be released the Beige Book which shows analyses that help Fed members to take their decisions about the future of the monetary policy. Definitely something to take care of.
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