Good morning
Welcome back, I hope you had a terrific weekend. Spurs managed to look good this weekend, Marks Leeds beat titles rivals Sheffield Utd, but GB lost the Americas Cup to New Zealand. Weather was mixed, if you were out at the right time it was sunny and felt positively warm, but at the wrong time you’d have got drenched. I managed to mow the lawn, it does look good after its freshly cut although its that time of year when you turn around and a new layer of leaves falls just as you’ve finished.
Scotland had a bit of a storm but I do love the way the press sensationalise things, particularly after we’ve seen the US hit by a couple of hurricanes recently. The BBC headline says ‘clean-up to begin after high winds’, while showing just a photo of a trampoline straddling a three foot fence. OK, I’m sure it was worse than that, but let’s not get carried away.
After the initial euphoria stemming from strong UK retail sales on Friday, GBP has called a little, with GBPUSD now 1.3025 and GBPEUR 1.2000, some 70 and 55 pips or so off their respective highs. EURUSD is currently 1.0850 as Moldova take to the polls to vote whether or not to join the EU. It is a close run thing, with less than 0.2% in it after 98% of the votes counted. The current Moldovan president has blamed foreign interference on the narrow result, as the country decides whetehr to align more with the EU or maintain close ties with Moscow.
Elsewhere, you’d have thought comments from RBA DepGov Hauser who said Aussie rates won’t fall as early or as far as other central banks, would support the AUD. However GBPAUD traded up to 1.9500 this morning, AUDUSD slipped back below 0.6700. We did have a China rate cut this morning, it had been expected but I’m wondering whether some thought we might see a larger cut, and perhaps AUD has shared some of the disappointment.
It was a busy week last week with plenty of UK data, the ECB rate meeting and various inflation reports. This week is certainly quieter, the first half of the week is mainly taken up with central bank officials speaking, plenty of Fed officials on the calendar ahead of their blackout period that starts at the end of this week. We have the BoC rate announcement Wednesday at which a 50bps cut is expected. The latter part of the week sees a host of EU, UK and US PMI releases,
Next week we have the UK budget. Many people I speak to have expressed concern as to what may be announced, we know it’ll have tax raises and I fear these could be harsher than we hope, but fortunately I don’t think we’ll see a repeat of the disastrous Truss/Kwarteng debacle a couple of years ago. Still, I find it difficult to see how GBP can really push higher ahead of next week’s announcement.
Gold prices hit new record highs of $2,733, led by ongoing geopolitical risks and, I presume, some renewed buying out of China. Israel still haven’t hit back at Iran but that doesn’t mean they won’t, meanwhile they continue to hit Hamas and Hezbollah targets.
That’s about all for today, not the most thrilling of reads I know but there really isn’t much for me to get my teeth into. Have a great day, I’m out again visiting clients and don’t think I’ll be missing much in the office other than admin.
- 13.55 Feds Logan speaks
- 18.00 Feds Kashkari speaks
- 22.05 Feds Schmid speaks
- 22.45 NZ trade balance
- 23.40 Feds Daly speaks
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