Good morning
A late flurry of USD buying yesterday sent GBPUSD to six month lows and EURUSD to one year lows of 1.2575 and 1.0460 respectively, some suggestion the move was a safe haven play moving money away from Europe after Russia used a new hypersonic missile in Ukraine, pretty scary and a deliberate show of force by Russia after Western weapons were fired into Russia by Ukraine. US responds with sanctions on Gazprombank.
EURUSD tested that 1.0460 area again this morning, while GBPUSD sank to 1.2550 as weaker than expected retail sales data hit the wires. They hadn’t been expected to be good to start with, but they failed to meet even those forecasts and with downward revisions to the previous month GBP had to fall.
Since then EUR has lost further ground after very disappointing EU PMI data was released. EURUSD has broken below key support at 1.0440 and on to the 2017 lows of 1.0340. EUR has lost ground against GBP as well, GBPEUR now up at 1.2090. At the same time GBP has also struggled against USD, GBPUSD trading briefly below 1.2500, perhaps concerns over the UK’s own PMI release at 9.30 to blame.
CHF, another traditional safe haven did push higher as well, GBPCHF traded down to support around 1.1120, and GBPJPY traded down to 193.35 as Yen caught a bit of buying as well. Bitcoin has bucked the stronger US dollar trend, moving just $500 or so short of $100,000. Indeed I have to say I do wonder whether Bitcoin is indeed becoming something of safe haven, not suffering the sort of painful forward points or cost of carry that comes with buying gold or yen.
AUDNZD broke higher again, reaching 1.1175, the highest level for just over two years, although it has since dropped back to 1.1125. Divergence between RBA and RBNZ policy still the driving force here.
Its noticeably warmer today, we’re above zero at least. We’re still forecast wind and rain tomorrow but perhaps not quite as bad as we’d been warned earl;ier in the week.
Plenty to look forward to this weekend, the Premier League returns, the highlight being Spurs v Man City tomorrow, although Arsenal v Notts Forest could be interesting given the two teams are currently on the same points as each other. Englands rugby team take on Japan on Sunday, England hoping to end their losing streak. And F1 returns after a break, Las Vegas is the venue. I’d love to be there.
Still, I have to say, and I know I’ll get a bit laughed at here, but I’m more excited about the release of the film ‘Wicked’. It’s a fantastic musical, one of my favourites, and I’m keen to see what it will be like at the cinema. I’m prepared for disappointment but it’s a great story and really great music. If you;ve not seen it, I’d recommend it, but the theatre show will no doubt be better than the film. I’ll let you know!
Sunday night we’ll have the latest NZ trade balance and retail sales. Next week is US Thanksgiving which generally wipes out Thursday and Friday. The calendar for data is pretty full on Wednesday with US GDP and core PCE among others.
For now, PMIs are the focus and they’re not looking good…..
Have a great weekend
- 09.00 EU manufacturing, services PMI
- 09.30 UK S&P manufacturing, services PMI
- 12.40 SNBs Schlegel speaks
- 13.00 ECBs Nagel, Villeroy speak
- 13.30 CAD retail sales
- 14.45 US S&P manufacturing, services PMI
- 15.00 US Michigan sentiment survey
- 15.40 BoEs Greene speaks
- 15.45 ECBs Schnabel speaks
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