Good morning
It was a quiet day yesterday, GBPUSD traded a range of 1.2770 to 1.2790, while EURUSD was mostly between 1.0560 and 1.0585. GBPEUR continues to hold just below 1.2100. We did see USDJPY push higher throughout yesterday, from an open around 149.85 to a high of 151.30, which dragged GBPJPY higher to the 193.25 area, the highest its been for a couple of weeks.
This morning we’ve got a marginally higher USD, with GBPUSD at 1.2750 and EURUSD 1.0545. USDJPY is also a touch higher at 151.70 although GBPJPY is still around 193.20, with 193.40 marking the highs so far. The weaker Yen comes as some banks adjust their BoJ forecast to a ‘hold’ next week, having previously looked for a rate rise.
Overnight RBA did indeed leave rates unchanged as widely expected but a slightly more dovish statement gave hope to those looking for a rate cut. RBA said inflation is still too high but seem more confident that inflationary pressures are declining. Markets are starting to look at a possible rate cut as soon as February, having not really considered a cut until May 2025. AUD is lower with GBPAUD back up to 1.9960 and AUDUSD down at 0.6830.
China shares opened sharply higher led by hopes that new stimulus plans could be announced later this week. The moves higher did unwind gradually overnight but most Chinese stocks still ended higher. The move higher comes despite disappointing export data from the latest China trade numbers. Plenty of trade talk doing the rounds, with China said to be limiting sales of components for drones that are pretty key to Ukraine’s war efforts, while there is a suggestion that DJI, a big Chinese drone manufacturer, could be banned from selling their products in the US. Meanwhile Taiwan has raised concerns about the ninety or so Chinese military ships in nearby waters. There seems to be a complacency over China’s intentions for Taiwan and I don’t like it.
Korean equities also pushed sharply higher by some 2.5% overnight and have held those gains although after Mondays declines this rally still doesn’t bring prices up to Friday’s close. A step in the right direction perhaps. Press reports suggest there is an arrest warrant out for President Yoon.
Eyes very much on Syria where rebels are celebrating the collapse of the Assad regime, however it is still very unclear how Syria will look once the dust settles. Both US and Israel have attacked various armed factions who could join fight for control of Syria. We have seen the effects of ousting dictators from their positions in countries like Libya and Iraq, none of which went particularly well.
We all know footballers earn significant sums of money, but that isn’t the only sport where earnings are high. Top golfers and tennis players can earn vast sums. But I have seen a baseball player who is reportedly signing a deal with the NY Mets that totals some £600 million over fifteen years. That’s £40 million/year, or £770,000 every week for fifteen years!
You’ll notice there is no calendar today, that isn’t because i have forgotten, but rather there is just nothing of note out. Tomorrow brings US inflation and the latest BoC rate meeting so enjoy the relative calm for now.
Have a great day
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