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  • richard evans

Calm heading into the weekend?

Good morning

Back in the office after a day or so on the road, overnight Asian markets were generally positive, keeping US dollar away from recent highs. The positive sentiment may be down to both Goldmans and JP Morgan suggesting fears of a US recession are overdone, plus a small rate cut in the 5 year LPR by 15bps by PBoC.

Some talk from Sakakibura, ex Japan Finance Ministry official, suggest USDJPY could hit 140-150 by the end of the year. Quite a claim, but people do listen to him. When in office he was known as Mr Yen for his influence on the currency. Less influential now but still interesting, I’d imagine BoJ would be acting if it started pushing towards those levels. USDJPY currently 128.00. The current FinMin, Suzuki has told G7 that Japan will respond to FX moves appropriately based on the G7 FX agreements

North Korea is struggling with Covid as cases reported pass 2 million. I’m not sure how accurate these numbers are but the word ‘catastrophe’ is regularly used when I read reports on this latest outbreak, even though North Korea themselves say they are having good results against the virus.

Aussie general election this weekend, a switch to Labour is widely expected form the conservative coalition. They could be coming it at a good time, just as a post-Covid recovery is beginning, while the unemployment rate is below 4%. Not sure we’ll see much movement in AUD although I do always have the feeling, perhaps unfairly, that a labour government would see AUD a touch lower, although a hung parliament may affect AUD to a greater extent. However despite this AUD is holding up well, AUDUSD 0.7060, AUDNZD 1.1025, GBPAUD 1.7665.

It is a light economic calendar today, i’m secretly hoping for a quiet day, current levels are a pretty good place to end the week. GBPUSD currently 1.2470, EURUSD 1.0570, EURGBP 0.8475 (GBPEUR 1.1800).

My U15s played last night, drew 2-2, slightly disappointing not to score more given we had so many chances but, as they say, you can’t win them all. We have yet another double header this weekend, if results go the right way it could see us crowned league champions, but we all know better than to count our chickens too early. I’ll report back Monday.

- 13.00 ECBs Lane speaks

- 15.00 EU consumer confidence

- 20.30 CFTC positions

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