Good morning
Yesterday’s US CPI numbers came in a touch higher than expected, the headline at 2.4% and core up at 3.3%. This was enough to push USD a touch higher yet again, GBPUSD hit a low around 1.3010, EURUSD slipped to a low of 1.0900 and USDJPY traded back up to the recent high of 149.50. Obviously the main questions and comments since have been about the next US rate move, some Fed officials seem happy to skip a cut in November, others see 25bps still appropriate. I haven’t seen any of them talk of another 50bps cut.
Since the initial moves, USD has backed off a touch, GBPUSD now 1.3050, EURUSD 1.0935 and USDJPY 148.75. GBPEUR is 1.1935, GBPJPY 194.15.
CAD is a touch weaker again today ahead of the latest Canadian employment data. GBPCAD now 1.7960, USDCAD 1.3765. I still see potential for further CAD weakness, if todays release comes in weak we could see more calls for a BoC cut of 50bps at their next meeting.
Hurricane Milton has left Florida and moved to the Atlantic where it is losing power. It caused plenty of damage, and therre has been loss of life, but while I don’t want to underplay the seriousness of the situation, I think the end result could have been considerably worse.
Another storm brewing is that around possible Israeli attacks on Iran. They do seem to have something planned, reports suggest they are looking for a greater response than Biden had expected, but obviously details are still unclear.
I mentioned the cricket yesterday and Englands incredible innings. Well, it carried on, they reached an amazing 823-7 declared. They have since bowled out Pakistan for 220 to earn what at one stage seemed a highly unlikely victory. If only Englands football team had followed suit. A dismal 2-1 loss to Greece yesterday evening has derailed the post-Southgate excitement. Indeed, Southgates rather dull, defensive, and slow, but ultimately reasonably successful tactics started to look favourable as the multi-million pound team looked more like a Sunday morning side. Carlsye, the interim manager who was being touted for the main job, looks far less likely to make it a permanent move.
There is no doubt we have some decent players, but I do fear they are only made it look better by the quality of the overseas players around them when they play for their respective clubs. On their own, they are still good, but some lack that little extra needed at the top level. Combined with a general lack of direction, it didn’t work well. We are used to better. Can they do better against Finland on Sunday? I certainly hope so.
In other sports, the America’s cup starts tomorrow. It is best of 13 races between GB and New Zealand, a competition we have never won, a bit disappointing as we were the hosts for the first race back in 1851. No doubt that Ineos’s vast money has helped us become a real challenger. The event takes place in Barcelona, the actual tournament has been going on for a couple of months now, it was taking place when I was out there in August, but this is the now the main event.
US PPI today could well be a market-mover. Last month it came in softer than expected, if we see the same this time we could see the US dollar lose some of the gains it has made this week. Of course, if it follows CPI and comes in stronger, the 1.30 and 1.09 levels in GBPUSD and EURUSD could be under pressure again.
When we arrive Monday we’ll had the latest China trade figures, more interesting just for the vast numbers they produce. The previous monthly reading was a US$90bn surplus. Think about that when Reeves talks of £22bn black holes.
Have a great weekend, be prepared, It might look sunny but its chilly. Still, it is mid-October I guess.
- 13.30 US PPI
- 13.30 CAD unemployment
- 15.00 US Michigan sentiment survey
- 15.30 CAD BoC business outlook survey
- 18.10 Feds Bowman speaks
- 19.00 US monthly budget statement
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