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  • richard evans

Still no deal of the US debt limit

Good morning

We start the week not very far at all from levels we saw last Friday. GBPUSD now 1.2420, EURUSD 1.0800 and USDJPY 137.85. USDCNY fixed above 7.0000 again, but at 7.0157 it was some 200 points lower than the previous day. It is slightly surprising US Dollar has held onto most of those recent gains when no progress is made in debt limit talks with the 1st June deadline fast approaching. Next week to be precise! Can’t quite believe its June next week.

Anyway its a day of central bank speakers today, ECB and Fed officials out in force. ECB members likely to still be talking up chances of more rate rises just as Lagarde did over the weekend, while Fed members are more likely to be playing it cool, considering a pause in rate rises while they assess the effect on the economy of recent policy changes.

G7 made quite a strong statement about its relationship with China, saying while they do not want to decouple, their relationship could thaw very quickly. G7 added that they will be happy for China to play by international rules and that peace in Taiwan is vital. Not sure either are likely to happen unfortunately. China meanwhile have banned US chipmaker Micron, citing serious security risks.

G7 also made clear they would support Ukraine for as long as it takes. This comes amid talk of a possible Ukraine counter-offensive, possibly helped by more advanced Western weaponry. Satellite picture suggest Russian forces have built serious defensive positions to try to hold the parts of Eastern Ukraine they currently control.

RBNZ will be announcing their latest rates on Tuesday night, feeling is for a 25bps rate rise which could see GBPNZD trade below the 1.9800 area that has supported since early April.

A splendid weekend weather-wise meant I had a lot of work to do in the garden. I’m sure someone is feeding my lawn with something to help it grow, I only cut it last week and it really needed another cut. I trimmed back a load of bushes as well which always creates far more mess to clear up than you’d ever imagine, fortunately the lawnmover gathered most of it up. Anyway it all looks a bit tidier but as always there remains much still to be done. Probably needs mowing again already!

At least working in the garden meant i didn’t have to endure watching the Spurs Brentford match. I was glancing at the score from time to time and Spurs held a 1-0 lead for a while, only to lose 3-1. They now can’t get into Europe which is pretty poor really although a few weeks again I did have a bet that they would finish outside the top 6 so that’s a small consolation.

After all those hours in the garden I have to say I’m feeling a tad weary today. I hope your weekend was more relaxing than mine!

- 10.00 ECBs de Guinfdos, Elderson speak

- 13.30 Feds Bullard speaks

- 15.00 EU consumer confidence

- 15.15 ECBS Lane speaks

- 15.50 Feds Barkin, Bostic speak

- 16.00 Feds Daly speaks

- 00.00 AUS S&P manufacturing, services PMI

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