Good morning
A quiet day yesterday as I’d expected, I’m pleased to say that for the time being my concerns over further GBP falls have not been borne out. GBPUSD had traded below 1.2100 briefly yesterday but is now up at 1.2240, GBPEUR is also off the lows that came in around 1.1870, now 1.1920. This comes despite UK Gilt yields rising again and US rates ticking higher. Starmer has confirmed his support for Reeves, finally saying she would be Chancellor until 2029. We’ll see.
Much of the GBPUSD shift higher is down to a weaker USD, indeed there were some Trump tariff headlines overnight which suggested a gradual introduction of tariffs could be seen which has had a negative impact on USD for now. The likes of AUD and NZD have benefitted from the comments, GBPAUD and GBPNZD trading to one month lows despite the GBP gains elsewhere, now 1.9705 and 2.1730 respectively.
USDJPY is 157.55, Yen not really taking advantage of comments from BoJ DepGov Himino who hinted at the chance of a rate rise next week. GBPJPY currently 192.50 having been to almost 190.00 yesterday.
Owners of properties abroad should take note. Non-EU buyers of property in Spain could face a 100% tax in a bid to deter foreign purchases and make housing more affordable. A long way to go before this becomes law but could have a huge impact on the Spanish and indeed other EU markets.
Premier League action returns this evening, Notts Forest take on Liverpool, could be a great match and I think Forest could be worth a small wager at 4-1. Chelsea and Man City also in action.
US PPI inflation numbers are out this afternoon, followed by comments from Feds Schmid. Just a few days ago he mentioned that Fed rates may already be near neutral and that any further rate cuts must be driven by data, with only gradual moves likely given the current strength of the economy. He is also eager to shrink the Feds balance sheet. Difficult to see how he’d be any less hawkish today.
UK inflation is out early tomorrow, the US CPI numbers are out tomorrow afternoon. Difficult to appreciate how important these releases are, I’m tempted to look at downside GBPUSD trades ahead of them. Indeed as I type GBP looks like its already started to have shifted a bit lower again, may well have missed the boat by the time I’ve sent this!
Have a great day
- 08.30 BoEs Breeden speaks
- 13.30 US PPI
- 15.00 Feds Schmid speaks
- 20.05 Feds Williams speaks
- 21.00 NZ NZIER business confidence
- 03.15 ECBs Lane speaks
- 07.00 UK CPI, PPI , RPI
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