Good morning
One of those days where it feels as though there isn’t really a great deal of news to latch on to but for some reason I’m feeling a bit nervous. Covid and inflation are the key issues of the day.
US CPI later today, the Fed have warned us that inflation will run hotter than normal for a while, but just how long they will stand it remains to be seen. I doubt they are going to rush into drastic action but the higher the headline figure the more chance there is of tapering sooner rather than later.
UK employment numbers were released this morning, pretty much in line with expectations and GBP has actually managed to make minor gains since the announcement with GBPUSD now 1.3870 and EURGBP 0.8525 (GBPEUR 1.1730). GBP seems unfazed by UK’s Frosts comments that EU must take ongoing negotiations seriously and that UK will act unilaterally to suspend the NI protocol if it deems it necessary. Meanwhile PM Johnson to speak today on Covid plans, looks like over 50’s will be offered a booster shot this year, likely to be the Pfizer jab which many think has a better effectiveness against the delta variant. Children over the age of twelve also look as though they will receive a vaccination. UK inflation is due out early tomorrow morning.
China are locking done another province as amid an outbreak of the delta variant in Fujian. So far case numbers are fairly low but the reality is we have no idea what the real situation is. Mind you, what we do know is when China lockdown they really do seem to take it seriously, which makes it far more effective.
RBAs Lowe downplays chances of an early rate rise, saying the delta variant has delayed the economic recovery. He is surprised the market is pricing in a rate rise before 2024 given the setbacks brought about by outbreaks and lockdowns, although did mention the recovery was not completely derailed. Lowe’s dovish stance saw AUD a bit lower against USD and NZD, now at 0.7345 and 1.0320 respectively.
Worth watching energy prices, a lot of talk of domestic fuel bills will be pushing higher, I know I keep getting messages saying mine are due to rise, I must remember to look at alternatives. Job for today is to look at switching tariffs.
The weather is a bit miserable here and the forecast suggests we could have rain all day. Not much to get out an about for so lets wait to see what new products Apple offer at their launch later today. I fear it may just be a tweak of existing iPhones, better cameras, that sort of thing, rather than any incredible new technology.
- 13.30 US CPI
- 13.30 CAD manufacturing sales
- 18.00 Apple product launch
- 23.45 NZ current account
- 00.50 Japan machine orders
- 01.30 AUD Westpac consumer confidence
- 03.00 China retail sales, industrial production
- 07.00 UK CPI, RPI, PPI
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