Good morning
US equities had a good day with the S&P up 0.7% and Nasdaq up 1.3%, this coming despite the prospect of US interest rates moving higher faster than had been thought a couple of weeks ago. USD broadly unchanged with EURUSD 1.1010, GBPUSD 1.3110. USDJPY has reversed a little and is off the highs at 123.60 after some comments from Japan FinMin Suzuki who warned the weaker yen must not become a negative, the first time a senior official has spoken against yen depreciation EURGBP 0.8400 (GBPEUR 1.1905). GBP showed a bit of weakness yesterday, helped by BoEs Bailey who came across a little pessimistic on the economy which is likely to see BoE slightly cautious when it comes to pushing rates higher.
AUD is performing well after retail sales numbers surprised to the upside. AUDUSD moves above 0.74500 for the first time since Nov last year, while AUDNZD is at 1.0875, exactly one year to the day that we were last at that level. GBPAUD has slipped to 1.7455, not far off the lowest levels since late 2018. There is some feeling that AUD has moved too far too soon, I’m not sure that means it will suddenly weaken but perhaps struggle to make further gains for the time being.
The slightly better market sentiment we have seen comes partly from hope that the Ukraine/Russia peace talks will bring some good news. There are some positive headlines, Ukraine suggesting it will not seek NATO membership for example, but I fear we are still a very long way from anything that looks like a Russian withdrawal. Interesting to read that Abramovich, along with a few others, seem to have suffered from suspected poisoning at peace talks, with hard line Russians who don’t like the idea of peace the likely suspects.
In Covid news, the UK reported a further 215,000 new cases yesterday and hospitalisation numbers are certainly on the increase as well, although the number of people on ventilators is down at 330 or so, well below the Jan 2021 peak of over 4,000. With the UK running as though Covid hardly exists, it is no surprise to see case numbers rising and it isn’t really a problem as long as the vast majority of cases are not severe. Will be interesting to see the impact the Easter holidays have. Many people looking to travel, quite likely case numbers continue to remain high.
Not the most exciting day in terms of economic data but it gets heavier through the week with US GDP tomorrow, UK GDP Thursday and the US nonfarm payroll numbers Friday. For many, the main interest outside the Ukraine peace talks will be the Met police beginning to issue fines for lockdown breaches by the government. That had all gone pretty quiet but its getting back into the headlines.
- 09.30 UK mortgage approvals
- 12.00 BoE quarterly bulletin
- 15.00 US consumer confidence, JOLTS jobs
- 15.00 Feds Williams speaks
- 22.45 NZ building permits
- 00.01 UK BRC shop prices
- 00.50 Japan retail trade
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