Good morning
A mixed set of nonfarm payrolls numbers made the market unsure which way to go. The headline was stronger than expected at +187k Friday pushed USD higher, however the previous month was revised lower, while the unemployment rate pushed up to 3.8% and average hourly earnings dipped to 4.3%. However a strong set of ISM PMI numbers helped push USD higher to close near the weeks highs.
GBPUSD closed around 1.2585, EURUSD around 1.0775. This morning the USD has given up a bit of those gains, GBPUSD now 1.2625, EURUSD 1.0805, leaving GBPEUR pretty much unchanged at 1.1685. EUR hasn’t really found much support from last weeks slightly higher than expected inflation numbers, which may have left the ECB with a difficult decision to make when they meet to discuss rates on 14th Sept. Perhaps Lagarde and Nagel will give us some clues when they speak later this afternoon.
Much of the focus overnight was on higher Asian stocks, driven by recent China stimulus that has helped China housing markets. AUD seems to have benefitted from this as well, GBPAUD traded as low as 1.9485 Friday afternoon, now 1.9515, quite a way from the recent highs near 2.0000. RBA will be announcing their latest interest rate decision in the early hours of tomorrow morning, most seem to be looking for unchanged rates after the softer CPI number last week. RBA have had a tendency to surprise the markets which recent rate announcements but a raise this time does seem a very unlikely option.
While we rightly focus on inflation levels in UK, EU and US, I do look from time to time at other regions. I note Turkey announced inflation this morning, it came in at a staggering 58.94%, well up from the 47.83% last time around. Mind you this is more in line with CBRTs inflation forecasts that were released in late July which no doubt drove CBRTs recent decision to raise rates 7.5%. USDTRY had traded down from 27.20 to almost 25.20 on that announcement, but it hasn’t taken long for TRY to reverse those gains, now 26.78.
It’s a US holiday today so other than those ECB speakers there isn’t much on the calendar until tonight. If we get a quiet spell, take look at Match of the Day for the highlights of the Spurs match against Burnley. Having gone a goal down, Spurs came out 5-2 winners with some stunning goals thrown in for good measure. Too early to talk of title contenders? Yes absolutely!
Today is 4th September, a day that is significant for personal reasons. Back on 4th September 1989 I set off for the City for my first job. It wasn’t a great job if I’m honest but through, I hope, hard work, decency, professionalism and growing experience I managed to work my way into a decent job in foreign exchange, importantly one that I thoroughly enjoyed despite the many ups and downs I experienced along the way. Now here I sit, thirty four years later, still beavering away and still enjoying almost every minute of it.
I hope that our clients benefit from both the experience I have developed over all those years, and also the passion that I still have for ensuring a safe and headache-free solution for their currency requirements. Those readers not yet fully-fledged clients should expect a call sometime soon. Its about time you got involved as well.
- 14.00 ECBs Nagel speaks
- 14.30 ECBs Lagarde speaks
- 00.00 AUS S&P services PMI
- 00.01 UK BRC shop prices
- 02.45 China caixin services PMI
- 05.30 RBA rate announcement
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