Good morning
Some weaker US PMI and sentiment data late last week sent the US dollar lower with GBPUSD hitting 1.2500 and EURUSD reaching 1.0515. Between GBP and EUR it was certainly the former which benefitted most, GBPEUR traded up from a Friday low around 1.1815 to a high this morning of 1.1910. Perhaps it was the expectation of a cut in ECB rates this week that sent EUR lower, or perhaps GBP was boosted by Trump’s comments that Starmer is doing a decent job and the pair have a good relationship. Reports suggest they’ll meet in the coming weeks.
We have seen a bit of USD buying this morning which has taken GBPUSD to 1.2450 but GBP is otherwise up across the board, now 1.9810, 2.1900, 1.7910 and 193.30 against AUD, NZD, CAD and JPY respectively. This is slightly out of kilter with some of the headlines I am reading about the UK economy, profit warnings and job fears but there is some hope we’ll hammer out some sort of tariff-free EU trade deal at some point.
Trump has been flexing his muscles after Colombia refused to allow a flight to land that was carrying deported Colombians from the US. Trump immediately slapped 25% tariffs on Colombia, who very quickly relented, let the flights land and the tariffs were removed. Gives a clear indication, if any were needed, of Trump’s intent and determination.
Meanwhile US dominance in the AI world is under threat after attention turned to DeepSeek, a Chinese firm claiming to have developed a credible AI model at a considerably lower cost than US counterparts. I presume we’ll see US tech firm shares such as Nvidia dropping on the US open.
Sport over the weekend didn’t go exactly to plan, Spurs managed to lose to lowly Leicester who are now only seven points behind Spurs in the league table. Its not looking good and there are huge question marks over whether Postecoglou will be backed by the Spurs board or whether his position is under threat. A huge amount rides on the Europa League match on Thursday. But with Spurs next premier league matches against Brentford and Man Utd I’m not sure I’m confident we’ll be cllmbing up that league table any time soon.
Elsewhere, Bournemouth put on an incredible display to beat high-flying Forest 5-0, while Man City came from behi9ng to beat Chelsea. Liverpool keep their lead at the top with a win, Arsenal are doing their best to keep up but for now it looks like Liverpool’s to lose.
Quiet day data-wise today and there is little in the way of UK data this week. Plenty still to watch mind you, with ECB and BoC rate announcements, both expected to cut rates 25bps, while FOMC are likely to keep rates unchanged. We’ll also have US GDP and core PCE, EU GDP and unemployment and Aussie inflation.
Have a great day, looks like being a wet week weather-wise and a chance we’ll get more strong winds. Best stay in and finish those tax returns…..
- 09.00 German IFO
- 15.00 US new home sales
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