Good morning
For this week, US data releases will be one hour earlier at 12.30 or 14.00 london time due to the clock changes.
In addition, FX option expiries will be 14.00 london time, not the usual 15.00 london time.
Another reasonably quiet day yesterday although a little more lively than Monday. US JOLTS jobs data was slightly on the softer side which led to a little selling but really nothing significant. GBPUSD hit a high of 1.3010 in the afternoon but had backed off to 1.3000 by the London close. GBP gained against other majors with GBPAUD and GBPNZD up at 1.9830 and 2.1800 by the London close.
Euro struggled through the day, EURUSD failed to capitalise on the mild USD weakness, closing the day around 1.0800, while GBPEUR ended at 1.2035 having been as high as 1.2050 at one point in the afternoon, just short of the 18th Oct highs which in turn was the high since April 2022.
Aussie inflation overnight was a slightly mixed bag, with headline rates coming in lower than expected, while the trimmed rate was in line with expectations, but with an upward revision to the previous month. The markets didn’t know what to make of it, AUD was pushed higher, then lower, but right now is back to pre-release levels, with GBPAUD 1.9820 and AUDUSD 0.6565. No cuts likely from RBA until Q1 26. For now AUD is more likely to be pushed by Chinese economy numbers and stimulus plans.
The limited but relative GBP strength across the board yesterday came as a bit of a surprise given the uncertainty ahead of the UK budget tomorrow. We’ll find out just after midday what Reeves has in store but I’m thinking CGT tax raises, increased tax on dividends and higher corporation tax, as well as higher employer NI contributions. Not ideal for SMEs, that’s for sure, but perhaps it won’t be quite as bad as I fear.
Today also brings German and EU GDP in the morning, and US GDP in the afternoon, along with US ADP employment numbers. We have some ECB officials speaking, then overnight we’ll have Aussie retail sales followed by the BoJ rate announcement, where no changes are expected
As I type, GBPUSD is 1.3010, EURUSD 1.0820, GBPEUR 1.2020 and GBPJPY 199.50. Gold has hit new record highs of almost $2,790, presumably led by Chinese buying but there is a suggestion other BRICS members may be following suit as well. It was as low as $2,710 over the recent BRICS summit less than one week ago, leading some to think there is more to this move than just general Chinese flow.
Spurs face Man City in the last sixteen of the League Cup this evening. I know we’re something of a bogey team for City in the past but really the way both teams have been playing I have very little confidence and fear we could see something of a rout. Just as with the budget, I have to hope it won’t be quite as bad as I fear. Several other big clubs in action as well this evening including Man Utd in their first match under interim coach Van Nistelrooy.
Have a great day and good luck, I think we’ll need plenty of it
- 08.55 German unemployment
- 09.00 German GDP
- 10.00 EU GDP, consumer confidence
- 12.15 US ADP employment change
- 12.30 US GDP, PCE
- 12.45 UK budget
- 13.00 German HICP
- 14.00 US pending home sales
- 15.00 ECBs Schnabel speaks
- 18.00 ECBs Nagel speaks
- 20.15 BoCs Macklem speaks
- 23.50 Japan retail trade
- 00.30 AUS retail sales, building permits
- 01.30 China NBS manufacturing PMI
- 03.00 BoJ rate announcement
- 06.30 BoJ press conference
- 07.00 German retail sales
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