Good morning
Well the world cup final surpassed all expectations, Argentina winning on penalties after an exciting match which had a bit of everything. It looked as though France were out, until a late comeback sent the match to extra time, which also had more than its fair share of entertainment. This has probably been one of the best world cups I can remember in terms of overall excitement level of matches, Englands failure in the quarter finals the only really disappointing moment. Whether or not it should ever have been in Qatar is another matter, but it was the teams that made the event special.
In the world of currencies, GBP is trying to recoup some of last weeks losses with GBPUSD looking like it will test the 1.2220 area, having been down to 1.2120 on Friday. 1.2220 was tested and held a few times Friday so a break above this morning would be quite significant. EURUSD is up at 1.0645 having had a brief spell below 1.0600 overnight. GBPEUR remains below 1.1500 after its break lower last week.
Aussie Foreign Minister Wang will be visiting China tomorrow, the first high level visit since relations broke down between the two countries back in 2018. We have rate announcements from both China and Japan in the early hours of tomorrow morning. Both expected to keep policy on hold, although there is some talk BoJ will change its statement to make the 2% inflation target more of a medium to long-term target than one that must be reached at the earliest opportunity. This has since been denied by Japan and is therefore unlikely to happen but it is not the first time we have seen talk of adjustments of inflation targets. USDJPY moved down from 136.60 to 135.75 on the initial news and then back up to 136.30 on the denial.
In Ukraine, President Zelensky has repeated his top military mans recent comments that Russia is planning an invasion some time early next year. It has been training the civilians it conscripted for a few weeks now, it hardly makes them an elite fighting force but the sheer numbers would make any new offensive a very different proposition. Talk that Russian military activity in Belarus is hotting up lends some weight to the invasion thoughts.
The snow has gone, exactly one week after it fell, the cold snap seems to have ended to be replaced by warmer weather and a lot of rain. Suddenly the cold doesn’t seem as bad. The warmer weather means we have seen a swing of some 20 degrees Celsius from the low temperatures we saw last week.
Looking to the week ahead, with schools on holiday it will be easy to think we are ready to wind down for Christmas. Probably a little premature, I’m looking at the calendar and see quite a lot of potential event risk, including Canada retail sales and inflation tomorrow and wednesday, UK and US GDP Thursday and a host of US data Friday including durable goods and Michigan sentiment survey.
Today looks like he quietest day data-wise so perhaps I should take the opportunity to get started on some Christmas shopping……
- 09.00 German IFO
- 10.00 EU labour costs
- 20.00 NZ Westpac consumer survey
- 21.45 NZ trade balance
- 00.30 RBA minutes
- 01.15 PBoC rate announcement
- 03.00 BoJ rate announcement
- 06.00 BoJ press conference
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