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  • richard evans

GBP slips after weaker employment data

Good morning

GBPUSD had pushed back above 1.2500 yesterday to reach 1.2535, but this mornings weaker than expected UK employment numbers sent the pair back to 1.2470, similarly GBPEUR backed off from 1.1515 pre-release to 1.1470 just after. EURUSD has been stuck pretty much in a 20 pips range between 1.0865 and 1.0885 since yesterday morning.

Reuters conducted a poll in which economists favoured two more rate rises from ECB but could see three more 25bps rises to take rates to 4%. Despite this, EUR has continued to struggle against GBP and USD since the ECB rate meeting on 4th May when GBPEUR was 1.1365 and EURUSD near 1.1100.

AUD slipped after the release of the RBA minutes and also again after disappointing China data overnight. GBPAUD traded up from 1.8680 to hit 1.8755 this morning, although the UK employment number wiped off most of those gains, the pair now back at 1.8700. GBPNZD also traded lower to 2.0000 after the UK data, although NZD doesn’t seem to have been impacted by the news Westpac are looking for NZ rates to hit 6% from its current level of 5.5%. AUDNZD has traded down from 1.0760 to 1.0695, some are looking to sell AUDNZD rallies looking for a possible test of the 1.061/20 area.

Erdogan will face a run off election in two weeks time, after he just fell short of the key 50% mark over the weekend. Erdogan must go into the run off as favourite having already won more of the vote than his nearest rival Kilicdaroglu, plus Erdogan is likely to pick up supporters from Ogan who has dropped out of the running having secured just 5.2% of the vote.

UK supermarkets are being investigated for artificially inflating food prices. There is also an investigation into supermarket pricing on fuel with evidence that some have increased their margins on petrol and diesel. No real surprise there. The same should be done for energy firms. I have said before that while i understand energy prices would rise, there does seem to be both a disproportionate rise in prices and a very slow decline in prices when the chance arises. I have also so far failed to find a satisfactory answer as to why they standing charges on energy bills have risen so sharply.

On the subject of rising prices, I see Centre Parcs has been put up for sale for around £5bn, or £12bn if sold during the school holidays. I saw that on Twitter, not suer who put it there but thank you to whoever I borrowed it from.

US retail sales today, for many this is the highlight of the week. We do also have some Fed official speaking today but we’ll be looking more closely on any news from Biden’s meeting with Congress leaders over the debt limit.

- 10.00 EU GDP

- 10.00 German ZEW

- 13.15 Feds Mester speaks

- 13.30 US retail sales

- 13.30 CAD CPI

- 15.00 Feds Barr speaks

- 17.15 Feds Williams speaks

- 00.50 Japan GDP

- 02.30 AUS wage price index

- 05.30 Japan industrial production

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