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  • richard evans


Good morning

Currency markets remain broadly unmoved ahead of tomorrows US employment numbers. GBPUSD currently 1.3775, unable to sustain any move towards 1.3800. EUR is actually a little stronger after some mildly hawkish comments from ECB officials, EURUSD now 1.1845 which leaves EURGBP at 0.8595 (GBPEUR 1.1635).

USD is a little lower across the board after a disappointing ADP employment number, you will remember that some people think this is a decent indicator to US nonfarms although in reality this is rarely the case. However there may actually be a case for saying the ADP number could be a better indication of not the closest nonfarms but the next months data. If we see a weak ADP next month, lets see if we get a weaker NFP headline. On the subject of the US I see New York is suffering from some pretty bad weather. I know climate change is a big issue but I really get the feeling we have seen more and more extremes of weather this year. Anyone think I’m wrong?

There is certainly still something of a holiday feel to the markets right now, the number of email bouncebacks I get when I send this report suggests many are still away or at least out of the ‘office’. Most kids are back to school next week so the roads will likely be busier even if the markets aren’t. We do have ECB, RBA and BoC rate announcements next week to keep us on our toes, as usual we’ll be looking for any signs of tighter monetary policy.

Australia trade balance overnight saw a record surplus of AUD12bio with both imports and exports higher. The worries over Aussie/China trade issues doesn’t really seem to be having any lasting effect.

China are flexing their muscles with a report suggesting they will ask all foreign ships entering the South China Seas to register with China. I’m not sure that will sit so well with other nations, quite what happens to ships who have not registered remains to be seen.

In Covid news the UK look set to offer a vaccine booster to vulnerable people, while children over the age of 12 look set to be offered a vaccine. There are ethical issues over whether we should get a third jab when some poorer nations have not received one but I’m thinking this is no different to the many advantages and disadvantages that already exist between various nations. We will hear more about this before we get our boosters I am sure.

Just as I’m writing about kids going back to school and extreme weather, I just took a peak at the forecast for next week. Its going to be over 25 degrees at the start of the week. Such a miserable August, and the weather turns just as the holidays end. Typical.

- 10.00 EU PPI

- 13.30 US initial jobless claims, goods trade balance

- 13.30 CAD trade balance, building permits

- 15.00 US factory orders

- 18.00 Feds Bostic speaks

- 00.00 AUS commonwealth bank services PMI

- 02.45 China caixin services PMI

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