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  • richard evans

GBP recovers some recent losses

Good morning

GBP had a decent day yesterday and has continued to make some gains after this mornings slightly better than expected employment numbers were released. GBPUSD now 1.3460, more ground has been made against EUR EURGBP now 0.8450 (GBPEUR 1.1830). BoEs Bailey commented that the decision to keep rates on hold in Nov was a close call, plus I wonder whether the news that Shell has talked about moving its operations to the UK has given GBP a bit of a boost. The Dutch government won’t have been pleased to hear of that. EUR suffered yesterday afternoon, EURUSD finally broke down through 1.1400 which triggered stops, reaching mid-1.13s, it is a bit off those lows now at 1.1375. Euro crosses all generally lower as well.

Russia continues to be warned of serious consequences should they take any military action against Ukraine, although whether western allies would take military action themselves against Russia to protect Ukraine is still regarded as unlikely. Russian military continue to build forces near the border.

RBA Gov Lowe has again made it clear any rate rise in 2022 is highly unlikely, indeed they still think rate rises won’t be needed until 2024. BoCs Macklem was a little more neutral, saying no policy changes expected but BoC would act if inflation started to run away. AUDUSD now 0.7340, USDCAD 1.2520.

Biden and Xi met online overnight, not a great deal of headlines other than both sides see need for greater cooperation, must not be drawn into conflict over areas of competition. Xi told Biden the world is big enough for development of both US and China. We are awaiting Bidens nomination for Fed Chair with Powell expected to remain in his post although Brainard still remains an outside possibility. No one is sure exactly when we will hear but I believe it will be before Thanksgiving which is 25th Nov.

I watched a bit of the England vs San Marino match yesterday evening. The result was 10-0 to England and by all accounts it should have been more. One of those where you wonder why they bother playing. Having said that, for the San Marino part timers, it must be a great feeling to be playing against some of the greatest teams in the world, knowing they stand very little chance but its not a bad story to tell the grandchildren. Before each of my kids were born I remember saying to my wife that we should perhaps fly somewhere like San Marino so they can be born there, giving them the potential to play for their ‘country’ if they were half decent at a sport. We never did it of course but I do still wonder whether the idea has any merit.

We have US retail sales later today and UK inflation in the early hours of tomorrow morning. Strong readings are expected from both which could well results in USD and GBP gaining against EUR. EU GDP not likely to offer much support to the single currency.

- 10.00 EU GDP

- 13.15 CAD housing starts

- 13.30 US retail sales

- 13.30 CAD manufacturing sales

- 14.15 US industrial production

- 15.00 US business inventories

- 17.00 Feds Bostic, Barkin speak

- 17.00 BoCs Schembri speaks

- 17.10 ECBs Lagarde speaks

- 20.30 Feds Daly speaks

- 00.30 AUS wage price index

- 07.00 UK CPI, RPI, PPI

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