Good morning
UK PM Johnson announced a cabinet reshuffle yesterday, I don’t need to go into the details here but as far as we are concerned the currency markets are unaffected, probably helped by the news Rishi Sunak remains as Chancellor. GBPUSD still 1.3830, while GBP actually a touch stronger against EUR at 0.8525 (GBPEUR 1.1730). UK retail sales are due out early tomorrow morning while US retail sales are out this afternoon.
Australia scraps a $90bio deal with France and enters a new defence agreement with UK and US. The deal is said to address rising ‘regional security challenges’. China don’t like it, nor do France of course. Not sure Scott Morrison, the Aussie PM was too happy either, when Biden appeared to forget his name, referring to him instead as ‘that fellow from down under’.
EURUSD is back below 1.1800, now 1.1785, Lagarde speak later this morning and we’ll see if she offers anything new to latch onto. I doubt it. Schnabel spoke yesterday and her comments could well have come across as mildly hawkish, suggesting rates will have to rise as Covid concerns dissipate. Could well be right, but lets be honest, we cannot see rates rising for a rather long time. EUR was certainly not moved, lets see which way Lagarde goes. I really can’t see her offering too much support for Euro.
Meanwhile Aussie employment numbers came in worse than expected overnight, AUDUSD now 0.7320 and AUDNZD at 1.0290. AUDNZD has had a rough ride over the past few months, it was up at 1.0950 back in March and above 1.0800 in June. Weak employment numbers mean RBA are more likely to be cautious going forward.
In Covid news, reports out of Israel suggests a booster jab have stemmed a rise in serious cases, you will recall Israel had the first full vaccination program but despite that infection rates have soared recently. The news that a booster has turned the tide on infections is certainly encouraging.
Little else to add of note today so I’ll finish there. Lets get through today and we can enjoy Spurs play this evening in the mighty Europa conference league. Lets hope they put up more of a fight than last weekend, which we don’t talk about of course,
- 10.00 EU trade balance
- 13.00 ECBs Lagarde speaks
- 13.15 CAD housing starts
- 13.30 US retail sales, initial jobless claims
- 13.30 CAD wholesale sales
- 15.00 US business inventories
- 23.30 NZ business PMI
- 07.00 UK retail sales
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