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  • richard evans

Sentiment up, USD remains soft ahead of US inflation numbers today

Good morning

After a reasonably quiet Asian session, majors hold gains against USD ahead of todays inflation numbers from the US. A lot of attention on these, rightly so, although I do think they’ll need to be a fair bit lower than expected to change the idea of a 75bps rise from the Fed next week. A headline around 8.1%, compared to 8.5% last time, and a monthly reading of -0.1% versus 0% last time is what we’re looking out for. Some rumours suggesting lower readings could be seen seem to be supporting risk sentiment for the time being.

As I type, GBPUSD is 1.1715, EURUSD 1.040 which leaves GBPEUR 1.1550, GBP a good bit higher against the single currency than this time yesterday. Mixed UK employment numbers this morning, with a lower unemployment rate even though employment rose less than expected. Some see this as a possible sign labour market pressures are easing, I think it’s far too early to tell and certainly unlikely to sway BoE thinking. UK inflation due out early tomorrow morning, that could be of more interest, a headline very close to last months 10.1% reading is expected, risk must be to the upside.

UK and EU seem to be coming to their senses over NI protocol, there is a deadline for the grace period of 15th Sept, UK are expected to ask for an extension and EU are likely to allow it, giving time for further talks.

Russia and China also seem to be happy to make agreements, this time though they talk of working together to create a ‘more just world order’. Slightly worrying.

Lots of noise about Ukraine’s progress in retaking ground captured by the Russians. It is great news of course but far too early to be excited amid reports that the Russians are withdrawing to regroup. However the Ukrainian resolve is clearly to be admired.

Speaking of resolve, although of course not on a par with Ukrainians, I see some people are already queuing in London to see the Queen lying in state. It is not due to open until 5pm tomorrow so those in place now still have a long wait ahead of them. Images from Edinburgh show people queuing overnight, that closes at 5pm today, I hope they all get their chance to visit. Good luck to anyone looking to make the journey to pay their respects, I hope your wait is not too long.

- 10.00 German ZEW

- 13.30 US CPI

- 19.00 US monthly budget statement

- 01.30 AUS Westpac consumer confidence

- 05.30 Japan industrial production

- 07.00 UK CPI, RPI, PPI

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