Good morning
It was a pretty quiet session in the foreign exchange markets yesterday, GBPUSD, EURGBP and EURUSD at 1.3545. 0.8535 (1.1720) and 1.1565 respectively, each within a few points of where they were this time yesterday. Markets seem to be awaiting US inflation numbers later this afternoon which are expected to show a further rise.
German ZEW disappointed yesterday while German inflation was bang in line with expectations this morning. China CPI numbers out overnight were slightly firmer than expected which together with some negative news from China companies sent Asian markets generally lower.
Chinas Evergrande has an overdue bond coupon payment due this week and has managed to sell its stake in a media firm w3hich should raise the funds needed to meet the payment. However, Fantasia, another Chinese developer, has also missed a bond payment and its shares plunged over 50% in trading as concerns mount that it will struggles to meet the $7.5 billion or so of loans and bonds due by middle of next year. In maybe better news, it is reported that Biden and Xi will meet virtually next week.
Elsewhere, I don’t like how things are shaping up on the Poland/Belarus border, with some suggestion Moscow is behind some of the troubles there. The EU are likely to have to get involved, Russia are also in the mix and its best to keep those two sides well apart. Belarus is unhappy with EU sanctions but still look for EU help on immigration.
EU/UK relations continue to look strained with ongoing talk of a possible trigger of Article 16 by UK, while there has even been a suggestion EU could rescind the entire Brexit agreement. Relations won’t be helped by UKs Sunak saying the City will not be bound by EU rules and will be able to set their own regulations.
I am out of the office for the next couple of days visiting clients, so have added in Thursdays calendar as well. Its fairly light as its US holiday and also a holiday in some parts of Europe. Yes, my absence means I am missing the US inflation release which could well be the highlight of the week, I’ll also be away for UK GDP numbers out early tomorrow morning. Watch also AUD, we have inflation expectations and unemployment data tonight, AUDUSD currently 0.7365 and AUDNZD 1.0360.
- 13.30 US CPI, initial jobless claims
- 15.00 US wholesale inventories
- 19.00 US monthly budget statement
- 00.00 AUS consumer inflation expectation
- 00.01 UK RICS house prices
- 00.30 AUS unemployment
Thursday 11th
They shall not grow old, as we that are left grow old Age shall not weary them, nor the years condemn
At the going down of the sun and in the morning
We will remember them.
Laurence Binyon, 1914
- 07.00 UK GDP, industrial production
- 09.00 ECB economic bulletin
- 21.30 NZ business PMI
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