Good morning
A new quarter is upon us. Don’t be fooled by those news reports of very high energy bills. Surely its an April Fools joke!
Putin has said that from today, unfriendly countries must purchase gas with roubles and has threatened o stop gas supplies if his demands are not met. There does seem to be something of a solution, if countries pay via Gazprombank, as yet away from sanctions, who could turn Euros into roubles and pay that way. Not sure if that actually works but with USDRUB back down to 83.00 if looks as though Putins demands have had the desired outcome, namely a currency that is no longer weak. Some great propaganda heading the way of the Russian population no doubt.
Meanwhile reports suggest Russian troops are leaving Chernobyl, but otherwise it is feared Russian forces are merely regrouping rather than withdrawing. Certainly more focus is likely to be seen in the South and East. Citizens are being evacuated from Mariupol, although the rescue process is apparently hampered by Russian troops preventing buses reaching the city. Once those citizens are gone, I presume Mariupol is in Russian hands and they are unlikely to give it back too easily.
EU inflation numbers this morning, risks seem to be to the upside after some EU countries reported higher inflation. Headline expected around 6.6%, I have seen some banks looking for a number well above 7.0%. Not sure if this will offer any support to EUR, which has been sold off over the past day or so, partly due to the Russian energy issues and partly as optimism of a Ukraine ceasefire wanes. EURUSD now 1.1060, some 125 pips of the overnight highs. GBPUSD for the record is broadly unchanged at 1.3120, GBP did make gains against the single currency, EURGBP at 0.8425 (GBPEUR 1.1870), well off yesterdays lows, more to do with Euro weakness than particular GBP strength.
US nonfarm payrolls the main highlight today, a headline of something near +500k seems to be consensus although I have to say most I have seen seem to be looking for something between +350-400k. Even if this were the case, its not going to alter Fed thinking. We do have a host of PMI numbers today as well.
Finally just a word on CAD. USD currently 1..2500, happens to be almost bang in the middle of the range seen over the past year. BoC rate announcement due on 13th April and it is likely they will raise rates 50bps, with some players looking for a further two 50bps rises at the June and July meetings. Not only that, a mention of balance sheet reduction is also expected in April. As such CAD likely to be supported and I wonder whether it is worth looking at some cheap downside USDCAD options. Support previously noted around 1.2450 back in Jan, a break below there could see a test of 1.2300. I’ll report back.
Some rather odd weather at the moment. Last weekend w were delving through cupboards looking for suntan lotion. Yesterday brought snow, hail and strong winds, and I woke up this morning to a very light smattering of snow on the ground. Don’t be fooled by the bright sunshine, its chilly out there. What a difference a few days makes. Lets hope we’re getting the cold stuff out of the system and can look forward to some lasting sunshine.
Some suggestion that earth will be hit today by a massive solar wave resulting from some seventeen solar flares witnessed over the past couple of days. There is even some thinking it could damage radio and internet systems. Apparently a similar storm in February destroyed 40 of Elon Musks Starlink satellites. How did I not know about this? Anyway the ‘coronal mass ejection’ is travelling at a mere 1.88 million mph, probably enough to do something, I just wonder of we’ll notice it. It is possible that the Northern lights will be visible further south than usual. Let me know if you get a glimpse.
Finally, the Premier league restarts this weekend and we also have the draw for the World Cup groups. Above all that though, attention is on my U15s who are playing in the semi-final of the leagues charity cup. Up against some strong opposition as you’d expect at this stage of the season, but with a bit of fortune on our side I reckon we’re in with a chance.
- 09.00 EU markit manufacturing PMI
- 09.30 UK markit manufacturing PMI
- 10.00 EU CPI, HICP
- 13.30 US nonfarm payrolls
- 14.30 CAD markit manufacturing PMI
- 14.45 US markit manufacturing PMI
- 15.00 US manufacturing ISM
- 20.30 CFTC position data
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