• richard evans

RBA lift rates ahead of BoE and Fed meetings this week

Good morning

Welcome back after the bank holiday weekend. I hope you all had the chance to enjoy some of the sunshine on offer.

RBA raised rated overnight by 25bps to take the rate to 0.35%. The move was a little more than had been expected (15bps), AUDUSD had jumped on the initial headline but is right back to pre-release levels at 0.7090, although AUD has held some gains against NZD, the pair traded as high as 1.1065 before retreating to 1.1040, still above the 1.0980 area before the announcement. This is the first time AUDNZD has been above 1.1000 for nearly two years.

GBP is a little higher against EUR this morning, EURGBP now at 0.8390 (GBPEUR 1.1920). That 0.8460 (1.1820) level I mentioned Friday remains a key area for me. I wonder if the lack of unity among EU members over Russian energy embargo is weighing on the single currency, or perhaps GBP is finding some support from a possible rate rise on Thursday. It is hardly running away mind you, GBPUSD currently 1.2525. Local elections this week could see conservatives losing an alarming number of seats, according to the Telegraph.

EURUSD is 1.0520, having traded below 1.0500 a few times this morning, Lagarde speaks this afternoon, I always try to highlight when she speaks although the reality is she rarely says much to move the single currency. A couple of banks looking at upside EURUSD now, not necessarily jumping into positions just yet but warning that several currencies are starting to look cheap against USD. Mind you with a 50bps rate rise from the Fed likely later this week, and another in June I’d be surprised if there were many USD sellers right now.

I see BP have recorded a rather hefty quarterly profit of $6.2bn compared with $2.6bn this time last year. As you know I rarely have a problem with a firm making profits although it is a little galling to see such a large profit when our energy prices are so high. However the firm did take a $24bn hit on closing its shareholding in Rosneft after the Russian invasion of Ukraine.

Finally, I am very pleased to be able to report my U15s earned another six points from our double header at the weekend to put us top of the table with five games in hand over our closest rivals. We are steadily getting through our backlog of fixtures. Looks like we have a match one evening this week, plus another double header at the weekend. Is another nine points too much to hope for?

- 10.00 EU unemployment

- 14.00 ECBs Lagarde speaks

- 15.00 US factory orders, JOLTS job openings

- 17.30 BoCs Rogers speaks

- 00.01 UK BRC shop prices

- 02.30 AUS retail sales

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