Good morning
More of the same yesterday, a bit of a US dollar move, this time sending USD lower, which took GBPUSD up gradually from 1.2550 to 1.2615 and EURUSD from 1.0475 to 1.0545, but by the London close we were back at those starting levels and if you’d been out of the office between 9am and 5pm you’d not have noticed much difference.
FOMC minutes showed the Fed still have a desire to gradually lower rates but there is uncertainty as to where ‘neutral’ rates are. This makes life difficult on many fronts, Goolsbee said that it makes sense to slow the pace of cuts as rates approach neutral, but if they don’t know where neutral is then it all becomes a little tricky.
In the EU, fiscal rules may be under some threat as it transpires Germany, together with Finland, Estonia and Ireland are not fully in line with spending allowances.
Overnight we’ve seen a generally weaker US dollar, GBPUSD is back up at 1.2600, EURUSD 1.0510 and USDJPY is 151.60 as I type, talk of a Dec rate rise still doing the rounds. News of a ceasefire between Israel and Hezbollah sent oil prices lower with both WTI and Brent moving down around 4% from the week’s highs. Attention will now turn to Hamas and whether a deal can be struck there.
RBNZ did indeed cut rates 50bps overnight, NZD did rally initially, perhaps down to position unwinds from those looking for a more aggressive 75bps cut. However NZD lost some of those gains as Orr signalled a further 50bps is likely at their next meeting in February, with their rate outlook into 2025 and 2026 lower than previously forecast. Orr acknowledged that Feb is some way off and made it clear they could always change policy mid-meetings if necessary. NZDUSD is currently 0.8900, GBPNZD down to 2.1370 and AUDNZD is sharply lower at 1.1015, the latter helped a little by slightly lower than expected Aussie CPI data.
Arsenal and City played in the Champions League last night, Arsenal had a solid victory but Man City’s woes continue as they squander a 3-0 lead to end up drawing 3-3. This evening Aston Villa take on Juventus, but the big match will be Liverpool v Real Madrid.
Today brings a host of US data including GDP and the Core PCE inflation reading, both of which do have market moving potential. With many Americans looking to get out of work early today ahead of Thanksgiving, there is a hope the numbers will be as expected and lead to little or no change. Thursday and Friday are quite likely to be non-events although we’ve been doing this far too long to think we can just put our feet up and close our eyes.
I’m getting emails galore about Black Friday sales and deals offering 50, 60 or even 70% off. All very tempting, I currently have my eye on a set of golf clubs that look like decent value. However, my youngest passed his driving test yesterday and I’m looking at insurance prices for him, I can assure you there are no Black Friday deals to be found.
Sorry this arrived a bit late. Have a great day and to our US readers, I hope you do get out early and enjoy safe travels and a wonderful Thanksgiving break.
- 13.30 US GDP, core PCE, durable goods, initial jobless claims
- 14.45 US Chicago PMI
- 15.00 US pending home sales
- 18.00 ECBs Lane speaks
- 18.00 BoEs Pill speaks
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