Good morning
A pretty quiet day in the world of currencies yesterday, for a while in the afternoon it looked as though the US dollar would make some gains, with GBPUSD and EURUSD dropping to around 1.2610 and 1.0450 respectively but the move was short-lived and by the London close GBPUSD was back up at 1.2640, EURUSD at 1.0475. This morning GBP tested down at yesterdays lows, now just a few points higher at 1.2620 is a touch lower at 1.2620, while EURUSD is still holding around 1.0470, ignoring this mornings German GDP data. As a result GBPEUR is a touch lower at 1.2060. GBP weakness could be put down to comments from BoEs Dhingra who warned that gradual rate cuts will slow the economy, clearly wanting more cuts and sooner. She is a known dove mind you.
Trump spoke yesterday after his meeting with Macron, who told Trump he needs to be careful not to look weak in Putin’s eyes. Macron seems to have done pretty well, Trump didn’t seem too upset at least. I did see some news headlines suggesting Ukraine may actually make a deal with the US over its rare earth minerals, if that came with security assurances that would prevent Russia from invading again in the future. But surely Russia will want a piece of those minerals as well, will they stop until they get some.
There’s such a lot going on right now and I’m interested to see how this plays out but I do of course hope for an end to the invasion that has claimed so many lives and caused so much destruction. But for Putin, if the war has done anything, it has driven a wedge between Europe and the US, a once powerful coalition that does seem to be crumbling before our eyes. The latest UN security council communique did not even mention that Russia was to blame for the invasion, the US choosing to side with Russia and China on that point. Perhaps it is all to get Putin to the peace table.
In other news, Trump has suggested that tariffs on both Canada and Mexico could well be introduced next week. You’ll remember both CAD and MXN weakened heavily on the original announcement of tariffs, which were then rescinded and the currencies returned to pre-announcement levels. They are now trading at 1.4255 and 20.46 against the USD, having seen a high earlier this month of around 1.4900 and 21.29. Surely worth a cheap upside option play just in case we see more of the same. 20 cad pips would buy the 6th march 1.4500 usdcad call.
One reason I am not a fan of crypto is how easy it seems to be to lose vast sums of the virtual currencies in computer crime. Now, hackers have stolen US$1.5bn worth of Ethereum from crypto firm Bybit, the largest theft by some margin. Bybit claims to be solvent and that users would be reimbursed. While crypto currency prices remain reasonably elevated, some crypto firms are seeing share prices fall sharply, such as Block Inc which traded down from Thursday’s close around $83 to a low today around $65.
As companies and countries seek to harness quantum computing, surely it becomes easier to hack into crypto firms. Microsoft recently unveiled their Majorana chip, a quantum chip that some think could transform computing. OK, its early days for quantum computing and we are yet to really see it in mainstream operation but I have no doubt we’ll get there one day and when we do, surely doubts must be placed on all online security, including the likes of Bitcoin.
The top of the table clash in the Championship took place yesterday evening with Leeds (1st) taking on near neighbours Sheffield Utd (2nd). Leeds went one goal down quite early on but found an equaliser with about twenty minutes to go. They then scored two goals in the dying minutes to give Leeds the win. They are now 5 points clear at the top with a terrific goal difference of +50. Surely we’ll see them in the Premier League next season. Mark will be happy.
That’s all for now, have a great day
- 10.00 ECBs Nagel speaks
- 13.00 ECBs Schnabel speaks
- 14.00 US house price index
- 14.00 BoEs Pill speaks
- 15.00 US consumer confidence
- 16.45 Feds Barr speaks
- 21.15 Feds Logan speaks
- 00.30 AUS CPI
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