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  • richard evans

Eyes down for EU inflation, US nonfarm payrolls

Good morning

Global stocks generally subdued while US 10 year yields push up to 1.73%, very close to the highs we say back in March 2021. This move has a more purposeful feel to it.

US nonfarm employment data due out this afternoon, a rise of 400k is expected following a disappointing 210k last month, but remember that for many, the strong ADP reading earlier this week could signal a higher headline number today. Average hourly earnings and unemployment rate also expected to show improvements. While we might not see US dollar running away, it should surely find ongoing support if numbers this afternoon are as, or better, than expected. Two Fed officials, Daly and Bullard were hawkish yesterday, Bullard confirming he was one of the members who projected three rate rises through 2022 at the Dec meeting.

Before then we do have EU inflation numbers. For now, EURUSD is 1.1310, GBPUSD 1.3540 which leaves EURGBP 0.8350 (GBPEUR 1.1975). GBPEUR did actually take another look at 1.20 overnight but failed once again, I have seen some short termers selling GBP near those highs but with stops just above that key psychological area.

Do have to mention Covid, I see UK recorded 179k new cases yesterday, Italy recorded 219k, France added 261k, while US had more than one million new cases in one day this week. I did see a suggestion that we should stop looking at case numbers, particularly as testing rules are being altered, and focus more on hospitalisations. That number is pushing higher, nearly 700 people were hospitalised yesterday bringing the current total to around 18,000. This is still well short of the 40,000 this time last year but worth watching.

As if Covid isn’t enough, we do have bird flu doing the rounds as well. Late last year owners of birds and chickens were told to move them inside to prevent contact with wild birds which may carry the disease. I see now that a case of bird flu in a human has been detected in the UK. Don’t be too concerned for now, apparently human to human transmission is extremely rare and this person does seem to have been in regular, close contact with many birds. Don’t really need another illness doing the rounds mind you.

In exciting news, I stumbled by chance on a website which recreates the old Ceefax pages. Showing my age perhaps but I used to be glued to Ceefax, partly because it took a while for pages to load but partly because it was a great place to catch up on news, sports, weather and cheap holidays. Even the old page numbers work. Search for Nathan Media Services and you should find it. A good bit of nostalgia but I don’t think it stands much chance of making a comeback.

Football returns this weekend for my team. County cup match against a team that prides itself on showcasing players to professional clubs. I’m expecting this to be the hardest test we’ve faced so far this season and if I’m honest I’d be surprised if we made it through to the quarter finals. We’ll find out in a couple of days, I’ll report back on Monday. In the meantime, have a great weekend, this week has still had something of a holiday feel to it, and judging by the number of ‘out of office’ replies I get to this I know there are many people still away. I’m thinking 2022 starts for real next week.

- 09.30 UK markit construction PMI

- 10.00 EU CPI, retail sales

- 13.30 US nonfarm payrolls

- 13.30 CAD employment

- 15.00 CAD Ivey PMI

- 20.30 CFTC positions

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