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  • richard evans

Alarms to sound on Sunday

Good morning

UK retail sales came in lower than expected this morning, blamed partly on poor weather. GBP lost a little ground across the board and as I type those losses have extended. Nothing massive, GBPUSD is back to 1.2400, GBPEUR 1.1330, but we’ve certainly seen a dent in hopes of those looking for a stronger GBP. The US dollar has benefitted and the likes of EURUSD has been dragged lower from 1.0960 to 1.0940, again not a massive move but does take it just that bit further away from the key 1.1000 area.

BoEs Tenreyro has said the BoE may already have tightened too much. She is usually pretty dovish so the comments aren’t too much of a surprise although it does show the difference of opinions between members, some of whom look for more tightening and Tenreyro who would possibly back a rate cut.

Japan CPI came out higher than expected overnight which did push JPY a touch higher initially and then a bit of waning risk sentiment pushed yen higher still early this morning with UDSJPY down to 133.740 and GBPJPY just back below 166.00 for the first time since Monday morning. B The higher inflation could possibly lead to a tweak in monetary policy, something the market is pretty nervous about. Not worth chasing the likes of USDJPY lower but mean UDSJPY will struggle to push to recent highs.

As we talk of 25bps rate rises and rates between 3-5%, spare a thought for Argentina where their central bank has just raised rates by 3% to 81% after a huge 104% annual inflation announcement. That isn’t great.

On the subject of ‘not great’, SpaceX did launch their Starship, the most powerful space rocket ever developed. All seemed to be going well until it experienced what Musk calls a ‘Rapid Unscheduled Disassembly’. In other words, it blew up. It turns out the separation that should occur around three minutes into the flight didn’t happen. Musk doesn’t seem too concerned, seeing it as just a small step in a long journey.

So, to the weekend. The weather which has been pretty good over the past few days looks like it will leave us with lower temperatures and rain coming along instead, so perhaps not much to look forward to. Do be prepared Sunday mind you, at 3pm our mobile phones should sound an alarm, a test of the system the government will use to contact the nation in the event of an emergency. I hope they’re not expecting to have to use it.

- 09.00 EU S&P manufacturing, services PMI

- 09.30 UK S&P manufacturing, services PMI

- 13.30 CAD retail sales

- 14.45 US S&P manufacturing, services PMI

- 15.30 ECBs Elderson speaks

- 18.45 ECBs de Guindos speaks

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