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  • richard evans

Currency markets quiet, await central bank speakers

Good morning

German elections sees Merkels CDU party narrowly beaten by the SPD. Both parties are vowing to be the one to form a government so expect headlines around coalitions for a while to come. EUR is not really affected, EURUSD trading at 1.1710.

China Evergrande still faces difficulties, a debt restructure looks on the cards although the risk of a collapse is still there. Reports that properties have been seized in order to protect investors emerge.

Chinas Huawei CEO has been released from house arrest in Canada as the US department of justice said it reached a deal to eventually drop charges if Meng complies with certain conditions. Two Canadians who had been held in China have returned to Canada, despite China assuring the world that the two were not being held in a tit-for-tat response. China continue to deny all allegations against Meng,

UK fuel supplies are stretched as people panic buy fuel, still talk the army may be called in to deliver fuel to petrol stations to boost stocks in the short term with some reports suggesting up to 90% of stations were without fuel. Typical really that as soon as the press say ‘don’t worry and whatever you do don’t go and panic buy’, it serves as a warning for people who of course panic. The government is looking at new visas to get lorry drivers into the country although whether this is enough to meet demand remains to be seen. GBPUSD currently sits just below 1.3700 while is at 0.8545 (GBPEUR 1.1700), half an eye on key support at 0.8500 (1.1765).

It’s a day of central bank speakers, Lagarde steps up this afternoon although she is unlikely to say anything particularly exciting. A few Fed speakers on the calendar, we will see if they follow the comments from their colleague Mester who surprised by coming across more hawkish than usual. She is in favour of tapering to start in Nov and be finished in H1 2022. She also thinks conditions for a rate rise could be seen by the end of 2022. US 10 year yields at 1.45%, pretty much a three month high. BoEs Bailey is up later today, the text of his speech will be released this afternoon. BoE had something of a hawkish tone last week, we are watching to see if Bailey continues this theme.

It’s a seriously wet and gloomy morning here, which matches the performance of Spurs yesterday afternoon, least said about that the better. However the sun was shining for the more important of Sundays fixtures, as Harefield U15s stormed to a 6-1 victory to retain their unbeaten record so far this season. No fixtures next weekend as I’m away playing golf, assuming the weather can improve and of course assuming I have enough petrol to get me there.

- 12.45 ECBs Lagarde speaks

- 13.00 Feds Evans speaks

- 13.30 US durable goods

- 14.00 Feds Williams speaks

- 16.00 BoEs Bailey speaks

- 16.00 ECbs Panetta speaks

- 17.50 Feds Brainard speaks

- 00.50 BoJ minutes

- 01.30 AUS retail sales

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