Good morning
With so much attention on stock prices right now it seems only reasonable to start there, and I am pleased to report some sense of calm has returned, with global equities closing on a generally positive note yesterday, and futures prices pointing to further gains today.
This relative calm hasn’t really fed into currencies, which does continue to see some decent swings. GBPUSD fell through 1.2700 yesterday afternoon to hit 1.2675, it has since staged a small recovery to 1.2700, while GBPEUR continues to lose ground, now 1.1635 having been down to 1.1605 yesterday.
USDJPY jumped overnight to 147.85 from 144.80 after BoJs Uchida eased rate rise concerns, saying the central bank would not raise rates when the market is unstable. It has since slipped back a little to 146.35. Meanwhile it was confirmed that Japan sold some US$68bn in their intervention on 29th April and 1st May. They were selling USDJPY up near 160.00, by my rough reckoning they are some US$4.5bn in profit on that trade. I know, it doesn’t quite work like that but they will be pleased with the subsequent moves.
NZ unemployment came in better than expected, with the unemployment rate coming in at 4.6%, below the 4.7% consensus although therer had been some talk that it could be even higher. NZD rallied on the more positive number, with GBPNZD immediately trading down from 2.1320 to 2.1185 and then on to a low of 2.1115 earlier this morning. The release makes a rate cut from RBNZ next week less likely but still runs at about 50%. It is worth noting that the better number is still higher than the 4.3% last time, perhaps the initial positive feeling could wear off. Tonight we will have the latest inflation expectations from RBNZ which as always has the potential market mover.
It is a light calendar today, we do have a rate announcement from Romania this morning where another 25bps cut well be seen to take rates to 6.5%, following the 25bps cut in early July from 7%. It is certainly not a clear cut decision though, some of the doves are pointing at services inflation that is still high as a reason for the central bank to keep rates on hold this time.
Canada provides the other possible excitement in the form of Ivey PMI’s this afternoon and the minutes from the latest BoC rate meeting after the London close.
We had a miserable day here weather-wise, it rained and was noticeably cooler. I’m pleased to see a bit of sunshine outside this morning. The Olympics continues, I have to say I’ve been more interested than I thought I would be but more because it gives the opportunity to show some sports that I wouldn’t ordinarily see. I’m thinking of the mountain biking, speed climbing, that sort of thing. A lot of cycling and wrestling on offer today among others.
Have a great day
- 09.00 Romania interest rate announcement
- 15.00 CAD Ivey PMI
- 18.30 BoC minutes
- 03.00 RBAs Bullock speaks
- 04.00 RBNZ consumer inflation expectations
Comments