Could be in for a quieter week as nonfarms out of the way, FOMC rate decision next week

Good morning

US data releases will be one hour earlier at 12.30 or 14.00 london time due to the US clock changes that took place at the weekend. 

In addition, FX option expiries will be 14.00 london time, not the usual 15.00 london time.

This will be until Sunday 30th when we change our clocks in the UK.

Well what a splendid weekend, the sun was shining, the weather warm, and everyone seemed in a generally better mood.  I spent some time in the garden, actually mowed the lawn although it didn’t really need it, but it just looks so much neater when it is cut and rolled.   I also took time to sit out and just take it easy for a while, admiring my freshly cut lawn.  The forecast this week is for less sun and colder temperatures, so I hope you managed to get out and enjoy it while you could.

A slightly lower nonfarm headline Friday, with an uptick in the unemployment rate to 4.1% and a small decrease in the average hourly earnings data offered USD sellers hope that they are well-positioned.  GBPUSD traded up to match the morning high of 1.2945, EURUSD rallied to 1.0885, and levels of of 1.3000 and 1.1000 started to be talked about.  Since then however the move has run out of steam , GBPUSD is back to 1.2890, EURUSD to 1.0820.  USDJPY at 147.15 is currently just a few points off recent lows which came in just below 147.00.

Ukraine are already feeling the effects of losing US backing, as they lose ground in Kursk that they have taken and held for some time now.  I think Zelensky and Trump are due to meet this week, let’s hope that goes better than their previous meeting, or at least hold talks behind closed doors.  Before then, US and Ukrainian officials are to meet in Saudi Arabia today.  I’d imagine these talks are more aimed at signing a minerals deal than looking at a lasting peace process, but I hope I’m proved wrong.

In Canada, Mark Carney has been elected as their new PM.  If you recognise the name, it is because Carney was our own BoE Governor back in 2013, through to March 2020.  Before then he was the governor of Canada’s central bank, so he is certainly experienced in the financial field, if not the political arena.  He’ll have his work cut out, given Trump’s ‘yes/no’ approach to tariffs.  He may also not be PM for long, as there is talk of a federal election as early as this month.  Carney joins just as China impose 100% tariffs on some Canadian foods in retaliation to tariffs Canada have previously imposed on China.   USDCAD is currently 1.4375.

The end of his tenure at BoE came just as Covid lockdowns were coming into place, pretty much exactly five years ago, give or take a day or two.  It is odd looking back on those days, where we were not allowed to go out, kids didn’t go to school and the world all but shut down, barring some essential services.  I do admit that I was lucky.  We had three kids but a big enough house that we were not all on top of each other, like so many were.  We also had a decent garden and some impressively warm and dry weather that allowed us time outside to sit and listen to the birds sing without the background of cars or lorries moving around. 

Of course, we also got lucky when my wife was taken to hospital with Covid.  She was in a very bad way and we all knew what happened to many people who were taken to intensive care with the virus.  Fortunately, this was in 2021 so a lot had be learned about the virus over the previous year, and a last throw of the dice with an experimental drug did the job, she was home a week or so later with no lasting effects that we know of.

A busy weekend for sport.  Spurs managed to grab a draw against Bournemouth, Arsenal failed to close the gap on Liverpool as they only drew at Man Utd, Liverpool now have a fifteen point lead in the league table.  Notts Forest beat Man City to stay in third spot, now just four points behind Arsenal.  If anyone speaks to Mark today, don’t mention Leeds, who slipped up yesterday, losing to Portsmouth.  Still, Leeds do remain top of the league on goal difference. 

England’s rugby team kept their hopes of the six nations title alive with a decent win over Italy.  England are now second in the table with just one match left against Wales who are currently at the very bottom of the six countries.  England will need a big score plus hope other results go our way.  Unlikely, but stranger things have happened.

Congratulations to India for their win in the cricket Champions Trophy final yesterday, they beat New Zealand by four wickets.  It looked like it might be something of a formality as India scored over 100 with no loss in pursuit of a pretty low 252 target.  Three quick wickets put Indian nerves on edge, but they soon settled down and reached their target with an over in hand. 

It is European football this week, most English clubs, other than Spurs, are in good positions after their first leg matches.  Horse racing fans will be enjoying Cheltenham this week, I hope the weather holds out for that.

After a busy week last week, we’ve got a much lighter economic calendar this week, with US CPI inflation likely to be the highlight on Wednesday.  We won’t hear from any US Fed officials as they are in their blackout period ahead of the FOMC rate decision next week.  We’ll be watching for any Ukraine news, plus of course we still have the issue of the global economy struggling in the face of so much uncertainty. 

Have a great day…

-  13.00 ECBs Nagel speaks

-  23.30 AUS Westpac consumer confidence

-  23.50 Japan GDP

-  00.01 UK BRC retail sales