• richard evans

GBP down on energy woes

Good morning


GBP takes a tumble with GBPUSD down to 1.3680, pretty much the lowest level for a month. A strong US dollar ahead of the FOMC meeting his week is partly responsible but there is also some concern in the UK over energy firms amid surging gas prices. Some small energy firms have already collapsed, with more set to follow. The government say there is no cause for immediate concern, although has suggested they may step in to save some energy firms from failing. EURGBP at 0.8560 (GBPEUR 1.1680) shows GBP weakness not only against the US dollar.


Chinese property firm Evergrande continues to hit the headlines. They are struggling to make bond payments and it is reported are offering discounted property to investors rather than meet its financial obligations. Thursday sees over $120mio of interest payments due, the market will be watching to see if these payments are made. The Hang Seng was down nearly 3.5% as a result, with lower risk sentiment seen across other markets.


Australia, US and UK facing a bit of a backlash to last weeks nuclear submarine deal. France are hugely upset that their submarine deal has been cancelled by Australia, recalling US and Aussie ambassadors. EU are suggesting trade talks with Australia may be affected over the distrust the deal has created. Australia say they are disappointed but have to put their national interests as top priority. RBA minutes are due tonight, AUDUSD currently 0.7230, AUDNZD 1.0300.


A very sparse economic calendar today but the week brings some interesting central bank meeting, namely FOMC, BoE, BoJ, SNB, Norges Bank and Riksbank. FOMC will be watched closely for taper talk, despite weaker than expected inflation numbers recently there is a feeling the Fed will make some sort of comment that tapering will begin later this year, without making a full announcement just yet.


Managed to get out in the garden over the weekend to mow the lawn. Why is that interesting? Well, I have mentioned before that I have a rather large garden, which seemed a good idea at the time but while it is lovely, it can actually be a bit of a burden. Anyway it can take a very long time to mow the lawn so a few years ago I invested in a sit-on lawnmower. Saves a lot of time. A month or so ago, I couldn’t get it started so I took to mowing the lawn with my ‘normal mower’, which took the best part of half a day each time. Finally, the firm that repairs mowers came round to take the broken machine away. Guess what? It started first time. I didn’t know whether to laugh or cry. The guy was obviously thinking what a complete idiot I am, but was very polite about it. I was hugely embarrassed but relieved that I was not facing a massive repair bill and that I’d be able to ride around in the sunshine mowing the lawn with ease. Perfect.


Finally, the news you’ve all been waiting for. Our second league match of the season saw us making the long trip to Aylesbury this weekend. The trip was worthwhile as we finished a rather dominant performance 5-1 to the good, the only disappointment was conceding in the last minute to ruin our clean sheet. We are top of the league, with three other teams all of whom have won their opening two matches. Something tells me this is going to be an interesting season.


- 02.30 RBA minutes


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