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  • richard evans

A bit of calm, is there a storm to follow?

Good morning

A degree of calm came over the currency markets yesterday. Global stocks were generally lower, USD higher against most majors, but nothing like the moves we have seen in the past week or two. Even the fall of GBPUSD around the London close from 1.1185 to 1.1115 didn’t feel too dramatic and it soon mad it back to the mid 1.1150s where it trades now. It has tested that 1.1115 area a couple of times now mind you so certainly something to watch.

The renewed push higher in USD came as various Fed officials continued with their ‘still plenty to do’ message. Mester said there was no evidence to support a slower pace of rate rises, Cook says more rate rises are needed, Waller sees more rate rises into next year while Evans sees rates at 4.5% by spring 2023. Only the latter may be seen as very slightly dovish given some Fed officials see rates there by the end of this year. More Fed officials speaking today, expect a very similar message.

The latest US employment numbers are released this afternoon, expect a headline in the region of +250k. Anything around there or stronger will support the Feds views, perhaps if the headline is significantly lower we may see some doubt start to creep in again. Some are looking for the unemployment rate to drop from 3.7% to 3.6%.

The stronger USD has seen USDJPY climb again to just above 145.00, the possibility of further intervention by Japan is still looming over the markets

I still look at headlines coming out of Ukraine. I am pleased to see Ukraine retaking swathes of their land back from the Russians and it would appear that Putins recent call-up of reservists and perhaps others is making the Russian population see things in a slightly different light. However I will again warn of the risks of backing Putin into a corner, the fear is he will take drastic action and of course by that I really mean use of nuclear weapons. Would he do so? Unlikely perhaps but then again there were many people who never believed he would invade Ukraine.

Not much more to add so I’ll wish you good day and once the US data is out of the way we can look forward to what we hope will be a very good weekend, after a week which had more to do with fighting fires and licking wounds than any real strategic planning. Spurs are away to in-form Brighton tomorrow, Arsenal Liverpool on Sunday should be a good one to watch. Should get some sunshine and hopefully it won’t be too cold.

Do have a good relax, we all deserve it, while doing so spare a thought for the people of Thailand who are mourning the loss of at least 37 people, including 23 young children in an attack on a childcare centre. A shocking crime. There are bad people in the world and bad things do happen, but do remember that fortunately the majority of people are good and plenty of good things happen across the world that are rarely reported.

- 11.25 BoEs Ramsden speaks

- 13.30 US nonfarm payrolls

- 13.30 CAD employment

- 15.00 Feds Williams speaks

- 16.00 Feds Kashkari speaks

- 17.00 Feds Bostic speaks

- Monday

- 07.00 UK un employment

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