Good morning
ADP stronger than expected yesterday, leading to more uncertainty over what we may see from tomorrows key US employment numbers, but perhaps makes a very weak reading less likely. Initial jobless claims today Otherwise focus is on the US debt ceiling and the news that a temporary extension could be agreed to get through the 18th Oct deadline, however this does little than kick the can down the road to December.
Natural gas prices fell yesterday and again this morning, down below $5.70 having been above 6.50 yesterday. The move lower came as Putin seemed to offer supply increases to Europe to avoid a major crisis. Even so UK households are warned of a possible increase in energy bills by maybe 30% next year. This won’t be helped at all by reports that France could cut energy supplies to UK over fishing rights and other Brexit-related disagreements, which they say are getting worse. Meanwhile US have considered releasing some of their crude oil reserves to contain prices.
The move lower in energy prices has helped risk sentiment to a degree with Asian markets mostly higher and futures indicating a positive start to the European markets. Even so, central banks will not be pleased if inflation continues to remain at elevated levels.
Russia have said the US are partly to blame for high NatGas prices after their increase in supply to Latin America led to a shortfall in Europe. They also mentioned that getting the disputed NordStream 2 pipeline running will settle NatGas prices. Can’t help thinking there has been some shenanigans going on in the background to create this mess in order to get full agreement for the new pipeline. Surely not!
China markets set to reopen tomorrow after their Golden week holidays. Talk is that the US and China have agreed to meet at a virtual summit before the end of the year.
German industrial production lower this morning has done little to affect the single currency, nor has the news that ECB are looking at new asset purchase options to replace PEPP when that program comes to an end. ECB minutes unlikely to offer much in the way of new information. Of more interest could be ECBs Lane who seems to have a busy day ahead of him, appearing three times on the calendar.
As I type EURUSD is 1.1565, GBPUSD 1.3590 which makes EURGBP 0.8510 (GBPEUR 1.1750). Will be interesting to see if GBP can hold, or even build upon these levels against EUR.
Finally, I’m not sure what its like where you are but I am still struggling to get petrol for my car. There is some diesel from time to time at garages but so far I haven’t found unleaded. I haven’t actually queued up anywhere for it mind you, but did take a little trip yesterday to see if I could find any on the off chance. I used 10 miles of petrol up in the process but my search was unsuccessful. I then went home and mowed the lawn with my petrol-engined mower. I had filled its tank up a while back and it had more than enough to do the job although I did wonder whether I should be syphoning the fuel out of it to put in the car instead. Still, I have a neat lawn now and a spare can of petrol in the shed which I’ll keep as a reserve just in case.
- 09.30 ECBs Lane speaks
- 09.30 UK furlough estimates
- 12.00 PBoCs Yi speaks
- 12.30 ECB minutes
- 13.30 US initial jobless claims
- 13.40 Feds Williams speaks
- 14.00 ECBs Lane, Schnabel speak
- 15.00 CAD Ivey PMI
- 16.45 ECBs Lane speaks
- 17.00 BoCs Macklem speaks
- 00.50 Japan household spending
- 01.30 AUS financial stability review
- 02.45 China caixin services PMI
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