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  • richard evans

All eyes on inflation

Good morning

There have been differing views on inflation from central banks, with BoEs Bailey making it clear over the weekend that they will have to act to contain inflation, while ECBs Lagarde still insists inflation is transitory. This difference is perhaps the reason EURGBP is trading at 0.8430 (GBPEUR 1.1860). GBP also up against USD, GBPUSD reaching 1.3770 on Friday, currently 1.3735. UK inflation due out early Wednesday morning.

EUR possibly also struggling on a couple of reports , first that ECB may increase limits on certain asset purchases, second the EU may withhold budget payments to members who don’t stick to EUs standards. Poland and Hungary are the prime candidates.

PBoC say that although Evergrande is a concern, they can contain risks. This hasn’t stopped Chinese shares trading lower though, as China GDP and Industrial production come out lower than expected, partly offset by a stronger retail sales reading. China meanwhile are unhappy that US sent warships through the Taiwan Strait last week, they say this is designed to provoke and will jeopardise peace in the region. FT reports China has tested a new hypersonic missile, the US are reported to be surprised at the advances made by China in this area.

NZD trades higher, reaching 0.7100 for the first time in a month on higher than expected inflation numbers overnight although has backed off a bit to 0.7065. AUDNZD now 1.0475 having been above 1.0600 briefly last week.

Oil prices continue to stay firm, with some traders looking for oil to reach close to $200 by the end of next year. WTI is $83.00, Brent crude $85.00

It was a successful weekend on the sporting front, Spurs managed to grind out a win against Newcastle whose new owners are no doubt looking at lists of potential new signings. Kore importantly though, my young team have put themselves into the next round of the Middlesex Cup with an emphatic 8-2 win against a Twickenham team who were previously unbeaten this season. With all our recent cup matches, we have slipped to third in our league by virtue of the two teams above us having played, and own, two more matches. We face one of those teams next weekend. Going to be interesting….

- 10.30 Feds Quarles speaks

- 13.15 CAD housing starts

- 14.15 US industrial production

- 15.30 CAD BoC business outlook

- 16.40 BoCs Lane speaks

- 19.00 US monthly budget statement

- 01.30 RBA minutes

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