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  • richard evans

Harder, Cuthbert!

Good morning

US Q4 GDP surpassed estimates yesterday coming in at 6.9% from an expected 5.5%. US dollar continued to trade firm since the FOMC announcement and this latest data has helped USD hold most of those gains. GBPUSD now at 1.3380 after testing just above 1.3415 earlier this morning, EURUSD down at 1.1130, leaving EURGBP at 0.8320 (GBPEUR 1.2020). GBP strength against EUR comes despite concerns that UK are willing to invoke Article 16 over the NI protocol, with Chancellor Sunak reportedly blocking anything that may upset UK/EU trade.

I’m not quite sure where we stand on the Sue Gray report into government lockdown parties. I had thought it would be published by now but I see the Met police have now asked No 109 to make minimal references to any events it is investigating. I’d imagine they are investigating most gatherings, so we may not discover the findings of the report for a while yet.

Russia/Ukraine crisis not going away, Russia seems to be placing more troops on the Ukraine border. No surprise that China are supporting Russia, saying NATO gives Russia legitimate security concerns, calling the worlds largest military alliance a ‘small clique’. While we wait to see if Russia do invade Ukraine, I am also reading that UK firms have been told to prepare for Russian cyber-attacks. As all this goes on, North Korea has been testing a variety of missiles. The world doesn’t feel as safe as it used to.

Next week sees rate announcements from UK, ECB and Australia which do have the potential to keep volatility levels high. Feeling seems to be that with the Russia/Ukraine situation ongoing, ECB are unlikely to consider tightening and as such are likely to remain one of the more dovish central banks, potentially leading the way for further EUR declines.

We approach another weekend, markets likely to be a little calmer today although we do still have some decent data to digest including US PCE. China on holiday next week for New Year celebrations, I understand travel is somewhat limited in order to prevent the spread of Omicron ahead of the winter Olympics that begin next Friday.

No Premier League football this weekend but we do have the transfer markets to watch instead. There was an interesting result in womens football last Wednesday, Chelsea beat West Ham 4-2. The Chelsea scorers, in order, were Harder, Cuthbert, Harder, Harder. Demanding stuff.

My lot are playing in yet another cup this weekend. We could actually do with getting dumped out of these cups as we have so far only played four league matches this season. However, we are unbeaten so far this season in all competitions, I know it will have to come to an end soon but lets not make it this week.

- 09.00 german GDP

- 10.00 EU confidence data

- 13.30 US core PCE, personal income/spending

- 15.00 US Michigan sentiment survey

- 20.30 CFTC position data

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