Good morning
It was a pretty slow day yesterday, not much in the way of movement as we’d expected. This morning we have had the release of the latest UK unemployment numbers, a strong set of data that will have the hawks worrying about BoE cutting rates too quickly and could well put a dent in the potential for another rate cut at the next meeting in September.
The claimant count was actually much higher than expected, but the unemployment rate ticked down to 4.2% from 4.4% last month, where a rise to 4.5% had been expected. Average hourly earnings came in at 5.4%, a touch down on the 5.7% last month but easily beating the 4.6% expected. A pretty healthy set of numbers, except for that rise in claimants.
GBP is higher as you’d expect although hardly a particularly significant move. GBPUSD is at 1.2800 having hit a high of 1.2810, GBPEUR has made it back above 1.1700, now at the highs around 1.1715 as I type. Early tomorrow morning we have the latest UK inflation numbers which as we know always has real market moving potential, but perhaps more so now given the prospect of further BoE cuts. A headline of 2.3%, up from 2.0% previously is expected, with core CPI hoping to have drifted a touch lower to 3.4%. We’ll know by the time tomorrow.
Not only do we have US inflation tomorrow, but also US inflation tomorrow afternoon, followed on Thursday by UK GDP and US retail sales. With US Michigan sentiment survey out Friday, there is certainly [plenty of scope for volatility.
Overnight we will have the latest rate announcement from RBNZ. Still see them keeping rates on hold but likely with a more dovish tone once again, but we cannot discount the potential for a rate cut. However, given the level of NZD at the moment I think they would prefer to keep the rate cut in their arsenal. For the record, GBPNZD now 2.1200, AUDNZD 1.0930 and NZDUSD 0.6040.
In other news, another rare sighting of the aurora borealis has been noted as far south as Cornwall, although I am yet to see the spectacle. It is also time to see the Perseid meteor shower. Both involve finding somewhere dark to camp out around midnight, something I have so far failed to do.
Still on the theme of space, scientists believe they have discovered proof that water in liquid form exists on Mars, something which would help a settlement on Mars should that ever happen. However at 10-20km below the surface, that is a long way to have to drill to access it. The deepest man made hole currently on earth is just over 12km, that took nearly 20 years to achieve before work stopped when the drill kept getting stuck in rock. Still, I’m sure Elon Musk would give it a good go.
Closer to home, in a couple of days we will have the latest crop of A level results coming out. This is one of the few years recently where I don’t have a child getting results, either GCSE’s or A levels. Still, I know how it feels, and my thoughts and hopes are with anyone with kids expecting their results. Best of luck to them.
That’s all for now. I’m trying to keep track of the latest Premier League transfers. Chelsea are leading the way having made eleven signings so far, spending £230m in the process. They are selling some players so they’ll recoup some of that money, but the vast number of players in their squads is reported to be causing logistical issues, with not enough room for them all to get changed for training. The BBC suggest Chelsea have some 55 players on their books. Just a few days to go before the new season begins. I think it’ll be a good one again, Man City are favourites but I wouldn’t be at all surprised to see them struggle more this year. I can see both Chelsea and Man Utd doing well, perhaps at the expense of Liverpool. As for Spurs, well I’ve been a Spurs fan long enough to have learned to expect nothing.
Have a great day
- 10.00 German ZEW
- 13.30 US PPI
- 18.15 Feds Bostic speaks
- 03.00 RBNZ rate announcement
- 04.00 RBNZ press conference
- 07.00 UK CPI, RPI, PPI
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