Good morning
What a terrific weekend, not too cold, not too wet, pleasant enough for me to go outside and tackle the remaining leaves that were covering the lawn. That, and a bit of general tidying up, too the best part of six hours on Saturday so you can imagine my plan was to spend much of Sunday relaxing. I’d forgotten of course about the 12 friends of my daughter who came round for an early Christmas dinner, the first time many of them had been together since they went off to their respective universities or travelling or whatever else they chose to do. All in all, a splendid afternoon. I can’t say I had to do too much as my wife had done a lot of the work but the washing up seemed to be my responsibility and I was rather pleased to finally out my feet up later in the day.
And here we are, another Monday and the last week before Christmas. After the excitement of the central banks last week I’d been thinking we could be in wind-down mode this week. A quick glance at the calendar though shows a pretty full few days. Overnight we have BoJ rate announcement and tomorrow sees EU and CAD inflation, Wednesday morning we have the PBoC rate announcement and UK inflation, Thursday is US GDP and then Friday its UK GDP. A lot to get through before we can really put our feet up.
Currencies overnight have been reasonably stable, GBPUSD 1.2690, EURUSD 1.0925, GBPEUR 1.1620, USDJPY 142.35. The US dollar is off its lows from last week, helped by comments from Feds Williams and Goolsbee who have said it is too early to claim victory in the fight against inflation and it is far too early for the Fed to be talking of rate cuts. ECB officials have been trying to talk EUR lower, Nagel in particular saying that ECB have reached a peak in rates although he too added that it’s a bit too early to talk of rate cuts. More ECB officials set to speak today, I can’t see them saying anything particularly different.
Yen is off its recent highs. The market is expecting BoJ to keep with negative rates into 2024 as the meeting early tomorrow morning. Whether they then choose to change in Jan or March 2024, or even later, remains to be seen. We may learn a little more from them today. I did look at a downside USDJPY trade just in case they did surprise us, the overnight 142.00 USDJPY put costs 100 yen pips, adding in a 139.00 knock out brings that down to 30 yen pips.
Over the weekend we had the anniversary of the first flight by the Wright brothers. Back on 17th December 1903 they made the first sustained flight by a manned, powered, heavier-than-air aircraft. It made a few flights, the longest being 260 metres. To think how far we have come with flying now is quite remarkable. Non-stop flights to Australia, supersonic jets, stealth bombers and of course space travel. Indeed a lot of these advances were made in a much shorter time frame, certainly much of this had already been achieved by 1970s. What have we been doing for the last fifty years? Still not got men back to the moon.
In other news I see Australia is struggling with yet another natural disaster. This time it is intense rainfall which has caused flooding in Queensland, with Cairns airport underwater and thousands of people being evacuated. They have had something like 2 metres of rain in this storm, including some 80cm in the past 24 hours alone, with more torrential rain expected.
In sport, Arsenal top the Premier league after Liverpool and Man City drew. A win for Aston Villa sees them hold third place, a very impressive first half of the season. Spurs remain just a point outside the top four. This week brings the EFL cup quarter finals, League One’s Port Vale will look for an upset against Championship side Middlesborough to get them into a very unlikely semi-final.
Have a great day, you still have a week before Christmas day so plenty of time to get the last minute shopping done. Any ideas for what to get my Mum greatly appreciated.
- 09.00 German IFO
- 10.30 BoEs Broadbent speaks
- 11.00 German Buba monthly report
- 13.30 ECBs Schnabel speaks
- 15.00 ECBs Lane speaks
- 21.45 NZ trade balance
- 00.30 RBA minutes
- BoJ rate announcement
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