• richard evans

BoE fails to move markets, will US nonfarms today?

Good morning

GBP broadly unchanged after a mildly hawkish BoE yesterday, Saunders was the one dissenter who voted to reduce asset purchases but BoE prefer to get rates up to 0.5% before reducing asset purchases and would not consider selling assets until rates are 1% or so. Q4 inflation expectations are pushed higher to 4% but BoE still see it dropping towards the 2% target into 2022EURGBP ticks below 0.8500, now 0.8490 (GBPEUR 1.1780) with an eye on those April lows around 0.8470 (1.1805). GBPUSD at 1.3920 having been up at 1.3955 briefly yesterday afternoon.

US employment numbers are the main event today, headline around +800k expected, the better the number the more chance there is of Fed looking to taper at their Sept meeting. It hasn’t always worked this way recently but I’d expect a strong number to lead to a stronger dollar.

Otherwise it was comments from RBAs Lowe making the headlines, coming as Sydney daily Covid cases hit a record high. Lowe still sees economic recovery moving quickly but notes the spread of the delta variant could put a dent in the recovery. He made it clear RBA will not be raising rates until inflation is sustainably at 2-3% and mentioned that RBA need to continue with QE while other central banks do the same in order to keep AUD down. He is obviously concerned about any AUD appreciation. AUD unmoved on the comments mind you.

The Olympics comes to an end this weekend, I was beginning to worry about what sport would be on offer when its finished until I realised that the Premier League starts next weekend. Quite looking forward to that if I’m honest. Some interesting transfers taking place, Man City splashing out £100m on Jack Grealish, we still await news of where Harry Kane will be playing next season, there was talk he’d go to Man City for £150m or so but I read this morning that Messi will be leaving Barcelona and I’m sure Man City will be interested which may put a move for Kane out of the question. Either that, or Spurs could use the Kane transfer money to lure Messi to White Hart Lane. Now that would be interesting. There is still plenty of activity to be seen in the transfer markets, that’s for sure.

Have a great weekend, not sure the weather will be terrific but Sunday looks like it may be dry, I’m actually at a wedding on Sunday so it would be nice if the rain holds off. This will be the biggest function that I, and many others, will have been to for at least 18 months, I think it might be a bit weird being in the same room with so many people. It will be interesting to see how people approach it. As long as I’m fed and watered I reckon I’ll be ok…..

- 13.30 US nonfarm payrolls

- 13.30 CAD unemployment

- 15.00 US wholesale inventories

- 15.00 CAD Ivey PMI

- 20.30 CFTC position data


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