• richard evans

32 years in the City

Good morning

Yesterday proved to be a rather quiet session for currencies as I had expected and it was mostly a similar story overnight. Equities have performed well amid something of a positive risk sentiment feeling.

China trade surplus widened to nearly $58.5bio, both exports and imports showed gains. Some suggestion that China may have to go back to Australia for certain imports such as coal as demand continues to rise. You will remember China have banned various imports from Australia such as coal, but Australia supply is now directed elsewhere. Will China go back cap in hand?

RBA earlier this morning kept rates on hold but did reduce asset purchases to AUD4bio, AUD did try to push higher but if anything is trading a tad lower than before the announcement. This had really been announced back in July but as I mentioned yesterday there had been some thinking that recent Covid outbreaks and lockdowns could hold back RBA plans. The weakness in AUD perhaps comes from the fact that although they have reduced monthly purchases they have extended the program to Feb 2022 from Nov 2022.

EU GDP out this morning together with German ZEW. EURUSD currently 1.1875, I don’t think we’ll see much in the way of market movement as a result of these releases.

GBPUSD at 1.3830, EURGBP at 0.8585 (GBPEUR 1.1650). GBP has been surprisingly unaffected by the news that EU have agreed a major concession over the Northern Ireland Protocol, allowing an indefinite extension of some grace periods which should prevent a repeat of the ‘sausage war’ we saw earlier this year. UK PM Johnson is widely expected to announce an increase in National Insurance in social care and NHS funding reforms.

I failed to mention that yesterday marked my 32nd anniversary of working in the City. OK, so I work from home now, but I still class the business we are in as ‘working in the City’ even though the daily commute has been taken out of the equation.

September is upon us, all the kids are back to school and judging by the few email bouncebacks yesterday it would seem most of you are all back at work. Just as the sun comes out! Never mind, its only here for the next day or so. Now we are all getting back into the swing of things I’ll be getting in touch with many readers who I’ve not spoken to over the summer to give an update on our hedge program results and, for those not yet involved, explaining how our new simpler account opening process makes getting started in the program even easier. No excuses.

- 10.00 EU GDP

- 10.00 German ZEW

- 00.50 Japan GDP, current account


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