Good morning
A reasonably calm day in the currency markets yesterday, GBPUSD spent most of the time between 1.2595 and 1.2620 although GBP did push higher again against EUR, GBPEUR hitting a high just a couple of pips short of 1.2100 overnight, before settling back at 1.2075, where we sit now. EUR suffering from that lower growth talk as well as the Ukraine peace talks which seem to split US and EU far more than anyone would have liked.
Overnight RBNZ cut rates 50bps as expected, NZD weakened initially but pared losses as RBNZ Gov Orr suggested the next couple of rate cuts would likely be 25bps each rather than the 50bps we’ve become used to in recent months. GBPNZD currently 2.2035 having hit a high just over 2.2200 on the announcement
UK inflation this morning had been expected to rise from 2.56% last month to 2.8% this time, but it actually pushed even higher, coming in at a whopping 3%. GBP did push higher on the release but fell back soon after, perhaps the market noting that the Core CPI reading was 3.7%, as had been expected.
Aussie employment due tonight, I wonder whether they could come in lower than expected and whether RBA had a heads up on the data before their rate cut earlier this week. I never know how much advance notice central banks get of data, but if I were in charge I know I’d be wanting to be a bit ahead of the curve.
Ukraine peace talks took place with US and Russia, but no Ukraine, which is a bit odd. Trump seems intent on getting a peace deal even if it means Ukraine giving up land lost to the Russian invasion. He also seems keen to have new elections which may see Zelensky ousted, the concern of course is that a pro-Russian could be elected. Trump seems to be blaming Ukraine for the invasion and worryingly seems more on the Russian side. Russia has said there can be no peace deal that involves EU forces on the ground in Ukraine. I wonder why!
US equities are pushing higher with S&P500 hitting record highs yesterday. Trump has intimated he may introduce a 25% tariff on imported cars. Gold prices are on the move higher again, now $2,935 having failed just short of last week’s record high of $2,942.
In other news, NASA are tracking an asteroid called 2024 YR4 which was first detected in late December. At the time they predicted an impact with earth was 1.2%. They have now increased that to 3.1%, quite a hefty increase. It may sound low but is only 1 in 33 and I wouldn’t be surprised if those odds increase again. 22 Dec 2032 is the key date. Perhaps we should drag Bruce Willis out of retirement while downloading Aerosmith’s ‘I don’t want to miss a thing’….
Man City in action this evening against Real Madrid. Madrid have a 3-2 advantage from the first leg and with them at home they are favourites to go through to the next round. City will have to pull off something very special. They are beginning to return to form but this will be a tough one.
That’s about all for now, I’m up in London today for a couple of meetings and will be on the tube before 9am. That’s a bit early for me. I might not even get a seat. Mind you, I’m getting to that age where someone may offer their seat to me. What on earth would I do if they did? Stand all the way? Or politely accept and sit comfortably. Decisions, decisions……
Have a great day
- 13.30 US housing starts, building permits
- 19.00 FOMC minutes
- 22.00 Feds Jefferson speaks
- 00.30 AUS employment
- 01.15 PBoC rate announcement
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