Good morning
US data releases will be one hour earlier at 12.30 or 14.00 london time due to the US clock changes that took place at the weekend.
In addition, FX option expiries will be 14.00 london time, not the usual 15.00 london time.
This will be until Sunday 30th when we change our clocks in the UK.
Bank of England did keep rates unchanged at 4.5% yesterday, a decision that surprised no one although the 8-1 vote was mildly startling. Dhingra was the only dissenter, calling for a cut. Mann, who had called for a 50bps cut at the last meeting, went back to looking for no change. That’s a really odd set of votes in my book. Mann is usually on the hawkish side so for her to have voted for a large cut in February was a real shock. But how can she now go from a 50bps cut to no change? It’s almost as though she just put her hand up at the wrong time last month but didn’t want to admit it.
Anyway, in summary BoE’s thinking isn’t too dissimilar to last month. They continue to watch for risks of inflation, uncertain how tariffs will play out and of course there is plenty of uncertainty at home with the spring budget next week. Rates are likely to go down, albeit gradually. GBPUSD danced around a little, trading a low of 1.2935 and a high around 1.2980. It continued to show strength in the crosses, GBPEUR moved up to 1.1975, and the likes of GBPAUD and GBPNZD traded back up towards recent highs around 2.0640 and 2.2600 respectively.
Currencies were reasonably stable for much of the night but through the early hours we have seen a bit of USD buying which puts GBPUSD currently at 1.2925 and EURUSD at 1.0825, leaving GBPEUR off its highs at 1.1940. You may remember I talked of a EURUSD trendline that I’ve been watching. It dates back to Nov 2022 and hadn’t been broken until Nov 2024 when EURUSD fell to the 1.02’s, now we’ve seen EURUSD breaking up through that line again in early March, support now coming in around the 1.0820 area. Technicals are not everyone’s cup of tea, I’m not a huge follower, but there are times where the charts look interesting.
South Africa kept rates unchanged at 7.5% yesterday, while Turkey raised the lending rate to 46% from 44%, a reaction to the sharp losses seen in TRY over the past day or two. The Turkish repo rate is unchanged at 42.5%
I mentioned the nice weather yesterday and I think we’re in for more of the same today. Yesterday was the official start of spring so no wonder we’ve got great weather. But don’t get excited, it doesn’t look like it’ll last into the weekend unfortunately.
I see Eddie Jordan has passed away. Jordan was the F1 team manager who gave Michael Schumacher his F1 debut back in 1991. He was a flamboyant man, probably not everyone’s cup of tea but certainly a huge personality who put his heart and soul into anything he put his mind to. He’ll be missed.
In other news, plenty of talk doing the rounds that scientists have located a massive structure beneath the pyramids in Egypt. It’s the sort of discovery I would love to see and I dearly want this to be true but unfortunately I think I’m going to be disappointed.
And speaking of disappointment, anyone due to be flying in or out of Heathrow today will certainly be disappointed, as the airport has been closed all day due to a massive fire at a nearby electricity substation. Outbound flights are grounded and incoming flights are being diverted. Now, the cause of the fire is as yet unknown. I don’t want to sound like a conspiracy theorist but as soon as I see something like this my first thought turns to possible sabotage. OK, I do hope I’m wrong, but we have seen infrastructure such as undersea cables damaged, perhaps recent cargo ships targeted, why would sabotage by one of the less friendly nations not be possible? Travel will be disrupted for today at least but I suspect the knock-on effects will last longer.
In sport, England play Albania this evening in the first match of the world cup qualifying campaign. This is England first match under new manager Thomas Tuchel, there is hope that he’ll try to ignite some excitement and belief into the team that, on paper at least, has a great deal of talent but, as Tuchel has put it, previously looked like it played with a fear of losing rather than a desire to win.
Also in weekend sport we have the Chinese F1 grand prix. Hoping it’ll be another one where we see a mix of manufacturers taking the top positions rather than having just one dominating the season.
Not much on the calendar today but it does liven up next week with GDP and inflation from both US and UK, plus UK retail sales and major PMIs from UK, EU and US. For now though, my guess is the City bars will start getting busy into the afternoon as people begin to turn attention away from the screens and instead look longingly at the sun out of the windows.
Have a great weekend….
- 12.30 CAD retail sales
- 13.05 Feds Williams speaks
- 15.00 EU consumer confidence
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