Good morning
As expected it was a reasonably quiet day in the currency markets yesterday, GBPUSD now pretty much unchanged from this time yesterday morning at 1.2415 having dipped to 1.2355 through the afternoon, EURUSD slipped back to 1.0910 but has now recovered to the mid-1.09s. This leaves GBPEUR a touch higher at 1.1340, despite some mixed UK unemployment numbers this morning.
Yen has stayed weak as Ueda continues with the easy monetary policy theme and until we see any change of stance Yen should remain weak. USDJPY up at 134.40 and GBPJPY making 2023 highs, trading within a few pips of 167.00. Elsewhere, gold has had a shift back below $2000, reaching around $1980 before making a slight recovery back to $2000. AUD pushed a little higher as RBA minutes showed a more hawkish meeting than expected, with a 25bps rise being discussed before eventually kept on hold, but with a clear message that further tightening could well be required. GBPAUD had traded down to 1.8400 although has since worked its way back to 1.8470.
China are talking about conducting another major maritime military drill, wanting to show their might as they aim to control waters around China and of course close to Taiwan. Meanwhile Taiwan are to buy 400 anti-ship missiles from the US which would be used to repel any China invasion.
ECBs Lagarde has said the status of currencies such as USD and EUR should not be taken for granted. This issue of reserve currency status, particularly the US dollar, is something that I have mentioned a few times over the years and only last week had a brief conversation with a far more educated man than I about the potential for the USD to lose its reserve status and how that could weaken the US dollar. We agreed it was something that could happen over time but the fact Lagarde is talking about it suggests perhaps its closer than we think even though it isn’t exactly imminent. With the likes of China, India and crypto all trying to get in on the act, it does seem a change in the world order as we know it is around the corner.
Apple have launched a savings account in the US offering a rate of 4.15%. Goldman Sachs have a hand in the service which has the potential to start something of a race to get cash deposits out of lesser-paying accounts. I’d mentioned Charles Schwab a while back, a firm losing money as equity investors moved their money to cash, this announcement from Apple will only make their life worse.
I had been looking forward to watching SpaceX’s latest launch but this has been delayed due to a small technical issue. The launch would have been the tallest and most powerful ever, some 120m tall with 33 raptor engines producing some 17.1 million lb of thrust. Hopefully it won’t be too long before the next launch attempt.
UK inflation numbers out early tomorrow morning are hoped to show a YoY decline to just below 10%, in the meantime we have some US housing data and central bank speakers to keep out attention. Have a great day.
- 10.00 German ZEW
- 13.30 US building permits, housing starts
- 13.30 CAD CPI
- 14.00 ECBs Elderson speaks
- 16.30 BoCs Macklem speaks
- 18.00 Feds Bowman speaks
- 05.30 Japan industrial production
- 07.00 UK CPI, RPI, PPI