1-0 to Germany already, Merkel strikes with UK quarantine suggestion
Well Euro Groups E and F showed us how to entertain in football yesterday, five goals in each of the Group E games with Spain winning 5-0 and Sweden just getting the better of Poland, 3-2. Group F was interesting for England, as we knew we’d be playing whoever finished second in that table.
I think that each of the four possible opponents filled the second place spot at one point last night, in the end we are welcoming Germany to Wembley next Tuesday after they battled through a thrilling 2-2 draw with Hungary who had been ahead for most of the match, which would have been enough to send Germany home. Its was always going to be tough for England whether we faced France, Portugal of even Hungary. We are going to have to up our game, that’s for sure.
France remain tournament favourites, England Germany and Italy all follow, with Spain out at 8-1. If I perhaps unfairly discount some of the countries I don’t think will win, there are still at least half in the knockout stages who have a decent chance. First of those matches are on Saturday. What on earth am I going to do over the next couple of evenings?
USD – Not a huge reaction in US dollar despite some rather hawkish comments from the various Fed officials speaking yesterday. Kaplan was his usual hawkish self, looking for a rate rise in 2022 and tapering of asset purchases sooner rather than later, Bostic made very similar remarks, looking for a late 2022 rate rise adding that Fed are near to lowering asset purchases. Rosengren not quite as hawkish but still optimistic. Bostic speaks again today along with several of his colleagues, watch for any similar comments from them.
EUR – EU leaders meet today and tomorrow in Brussels and there will be a press conference at the end of each day. Some suggestion they will talk about rebuilding relations with Russia, timing on that couldn’t be better after the reports Russia fired warning shots on a Royal Navy ship near Crimea. Otherwise I presume Covid will be on the agenda, with Merkel already saying UKs rising cases means she’d like any Uk traveller to quarantine on arrival in the EU. EURUSD at 1.1935
GBP – GBP continues to find support ahead of BoE rate announcement, GBPUSD did trade up to 1.4000 yesterday afternoon, slipped back but mid 1.39s held well and as I type we are at 1.3980, where we were this time yesterday, Not sure BoE will give us much in the way of new ideas, the general feeling is that they will wait to see the situation after the furlough scheme ends in September before deciding on policy, which seems reasonable given we do think the scheme is hiding some nasty truths. We hope that the Covid situation will be clearer by then, case numbers are rising, the key now is whether vaccines control the spread and severity of the virus.
JPY – Some excitement overnight in JPY as USDHPY traded above 111.00 to hit around 111,10, the highest level since March 2020. It wasn’t the biggest move ever but each bif figure broken in USDJPY garners much attention. Difficult to pinpoint the reason for the move, some see demand in crosses such as AUDJPY having an impact, while others suggest higher EURJPY levels reflect the difference in vaccine roll out between EU and Japan. Tokyo Olympics still looks like going ahead in late July. I’m not so sure.