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Good morning

 

Yen is stronger once again, UDSJPY traded down to 154.35, the lowest level since mid-May, now 154.65.  As always when Yen pushes higher, we look for signs of intervention.  On the face of it this looks more like just a USDJPY sell-off, exaggerated by a push through technical support levels, however I would not be surprised if Japan had, shall we say, gently helped it on its way.  GBPJPY has slipped below 200.00, now 199.40 having been as low as 198.95 earlier this morning.

 

GBPUSD has been pretty stable so far this week, now 1.2890, a few pips lower than this time yesterday but nothing really significant.  EURUSD is 1.0835, also a touch lower, while GBPEUR is 1.1895.  Some interest in commodity currencies, both AUD and NZD are continuing their move lower, with GBPAUD now 1.9530 and GBPNZD 2.1725, both just off the highs from earlier this morning which saw GBPAUD at its highest levels since September last year and GBPNZD breaking its March 2020 highs to hit levels not seen since May 2016.  One month ago GBPNZD was around the 2.06 area, quite a move that has, to some extent, gone relatively unnoticed.

 

A big day for another commodity currency today.  Bank of Canada will be announcing their latest rates decision this afternoon.  Everything is pointing towards another 25bps cut to 4.5%, we have had softer inflation numbers and some weak housing and retail trade data recently which is likely to influence the decision, although there are still a couple of economists who think they will pause this time around.  USDCAD now 1.3790, GBPCAD 1.7785.

 

Although the bookies still have Trump marginally ahead in the US Presidential elections, some polls are now showing Harris with a slight lead, having broken a host of fundraising records.  Biden is set to speak tonight, his first such speech following his decision to withdraw from the Presidential contest.  We may find out what finally encouraged him to withdraw.

 

In France, Macron has rejected an attempt by the left-wing alliance to name a prime minister, confirming the government will remain in place through the Olympics.  Meanwhile some 75,000 police and troops will be taking to the streets of Paris in a security operation of unprecedented size.

 

Other than the BoC announcement, we will have EU, UK and US PMIs through the day, all potential market movers, particularly should the US readings come out softer than expected which will encourage the doves to look for a Fed rate cut at its meeting this time next week.  There are many road closures in the capital, ahead of the opening ceremony.  I can only hope that the Olympics takes place with no major security issues.  An attack on a soldier in Kent yesterday evening reminds us that there are always some people out with a desire to harm others.

 

Aside from the Olympics, I’m starting to look at the football transfer market gossip a bit closer as the start of the season draws nearer.  Most of it is nonsense, perhaps with a degree of truth in it, but we see many teams linked with many players around this time and they rarely come to fruition.  Plenty of time before the Premier league kicks off on 16th August. 

 

Have a great day

 

-  09.00 EU manufacturing, services PMIs

-  09.00 South Africa CPI

-  09.30 UK S&P manufacturing, services PMIs

-  13.00 ECBs Lane speaks

-  14.45 BoC rate announcement

-  14.45 US S&P manufacturing, services PMIs

-  15.00 US new home sales

-  15.30 BoC press conference

-  21.05 Feds Bowman speaks

-  01.00 Biden speaks

 

  • richard evans

Good morning

 

Not a bundle of news from the currency markets this morning, GBPUSD is 1.2925, EURUSD 1.0885, still just unable to really breach 1.0900, GBPEUR 1.1870.  If these levels sound familiar, they are pretty much where they were this time yesterday. 

 

USDJPY is 156.65, over 500 pips off the July highs, remember we believe Japan intervened by selling USD when the US inflation numbers came out a couple of weeks ago.  Since then we have seen some further moves lower in USDJPY, it reached 155.50 late last week.  GBPJPY is 202.25, worth watching 202.00 which has really been the lows over the past month or so.

 

We have a rate announcement from Turkey today, I tend to watch this only because the numbers are pretty incredible.  Rates are currently 50%, they are expected to stay there although some are starting to talk of potential rate cuts after inflation has declined from its highs of almost 75% in May to 71.5% in June.  Possibly a touch early.  USDTRY is 32.95, EURTRY 35.90, GBPTRY 42.65.   

 

I’ve not really been to Turkey much, but I do fancy going.  I did have a look at possible cheap holidays to Turkey recently but they all came in quite a lot more than I’d expected.  I’m not saying there are no bargains, but most of those I looked at and most people I know who have been have looked at all-inclusive deals which were priced more akin to UK prices.  I’m sure there are places where you feel like you’re getting some value at 42.65 Try to the GBP, I’ve just not seen them yet.  Or maybe they are good value, just a lot more than I thought I might get away with, particularly now I’m paying for five adults.  Any suggestions feel free to let me know.

 

Much of the news is obviously on the US Presidential race, Harris gaining quick support following Biden’s stand down, she reportedly raised US$81m in the past day or so to help her campaign and seems to have the support needed to secure nomination.  I can’t help thinking that this is what is wrong with US democracy.  It seems one can really only stand if they have huge bundles of money to help them along.  I have no doubt there are some better candidates out there but without the vast financial support required they won’t stand much of a chance.

 

There is a lot of speculation as to how Biden is right now. Obviously the source of much merriment when he fumbles his way through speeches, but remember he remains the President of the US and there is a decent chance he is more ill than is being reported.  As current vice-president, could Harris become the next President ahead of the November elections?

 

Just a few days to go before the Paris Olympics begins.  I’d mentioned the other day that I didn; think the Olympics were quite the event they used to be.  I remember gathering round the TV to watch the flagship races, such as 100metres, or 4x100 and 4x400 relays.  I don’t feel the same these days.  OK, if I’m in when its on I’ll watch it, but I’m not adjusting my extensive(?) social calendar around the Olympics.  My comments were met with a mixed response, some of you completely agreed, while some are counting down the days, looking forward to the Olympics as perhaps I used to. 

 

Have a great day, it does have the potential to be another quiet one but with a busier economic calendar over the next few days there is a chance things could get a little more exciting.

 

-  12.00 CBRT rate announcement

-  15.00 US existing home sales

-  15.00 EU consumer confidence

-  00.00 AUS Judo Bank manufacturing, services PMI

 

 

Good morning

 

Well its been a few days since my last report and It feels like a lot has happened in that time.  Thursday I went under the knife for a shoulder op to tidy up a couple of bits from the replacement I had a couple of years ago.  All seems to have gone well although I’m now stuck with an annoying sling and an inability to do too much with my left arm for a period of timer.  It shouldn’t be too long, although I do want to be sure I don’t rush into anything that would negate the work they have done.  I am amazed that you can have muscles and tendons detached and reattached and come home with movement, feeling and little in the way of pain. 

 

The timing of the operation could hardly have been better.  I missed the worldwide outage of computer systems.  While recuperating, namely sitting on the sofa feeling a bit sorry for myself, I had the Open, test cricket, F1, Hurling and Tour de France to keep me company.  Oh, and some decent weather as well although sadly I didn’t venture out too much.  What a way to recover though.  Congratulations to Schauffele in the Open who took a well-earned victory over Justin Rose.  England looked like they were going to be in for a difficult time in the cricket but a last innings collapse from the West Indies gave England victory, and in the F1 it was Oscar Piastri who took the chequered flag.   Hurling is quite a decent spectacle, not sure I could watch it every week but its fast, action-packed and pretty brutal at times.

 

Tadej Pogocar took the Tour de France title for the this time but it was Mark Cavendish who deserves a special mention for his historic achievement of breaking the record of the most stage wins in the race at the age of 39 years old, having twice come out of retirement to achieve the feat having failed last year after a crash ended his race with a broken collarbone.   With 35 stage wins he is now ahead of the legendary Eddy Merckx. 

 

Very well done to all those winners, and of course those who took part.  Someone who won’t be taking part in a contest now in the US president Joe Biden who, after much talk, speculation and promises he is fully committed to being President again,  has finally stepped out of the November elections, handing over to Kamala Harris.  Trump remains odds-on favourite to win the election, Harris frankly doesn’t look as though she has what it takes with almost as many videoed outtakes and nonsensical mutterings as Biden.

 

To the markets, well the US dollar has gained and GBP dropped a little since my last report from the middle of last week.  GBPUSD had hit a high of 1.30445 on Wednesday, by Friday afternoon it was back down at 1.2900, now 1.2925.  Similarly, EURUSD had reached 1.0945 before slipping back to 1.0880, not quite seeing the scale of losses as GBP which is highlighted in the fall in GBPEUR from 1.1930 to current levels around 1.1870. 

 

ECB left rates unchanged last week as widely expected, we do have a BoC rate meeting this week and after softer than expected inflation numbers last week  the consensus seems to be for a 25bps cut in rates.  USDCAD currently 1.3745, GBPCAD 1.7760.  Otherwise, interest this week comes from a host of EU, UK and US PMIs, US GDP and US inflation data in the form of PCE.  So we do have some decent data this week but I must warn you that next week is where much of the event risk remains, with FOMC rate announcement and nonfarm payrolls from the US, while we will also find out what our own central bank will see fit for UK rates. 

 

Have a great day, not much on the calendar today but it does pick up later in the week.

 

-  11.00 German Buba monthly report

 

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