Good morning
Yesterday was pretty quiet although perhaps not as quiet as we’d expected. USD saw further weakening, with GBPUSD trading up from 1.2650 to 1.2700 and EURUSD also traded higher to 1.0575. Both pairs took another leg higher this morning, GBPUSD reaching 1.2750 and EURUSD 1.0595 but this was short-lived and we are now back to those 1.2700 and 1.0565 areas. This leaves GBPEUR at 1.2020 having peaked at 1.2040.
The big moves is Yen. This morning USDJPY traded below 150 for the first time in over a month, reaching 149.50 before recovering to 150.15 where we currently trade. Higher than expected Tokyo inflation overnight plus further talk of BoJ rate rise in December seems responsible for the move, helped by an already weaker USD.
AUDNZD is down at 1.1000 which I find a bit strange given RBNZ remain dovish, another 50bps cut in February is likely, while Aussie rates remain on hold and could well do so until May next year. RBA are actually undergoing a major overhaul, splitting interest rate setting and governance into two separate committees. There is uncertainty as to who will sit on the rate policy board so it is likely to become harder to forecast rates.
EU inflation numbers out this morning, always worth watching but rarely move the market to any great extent. ECBs Villeroy has said there is still signifiocnat room for ECB to cut rates. Of more interest perhaps is the fact that French bond yields are now higher than those of Greece, something the FT have highlighted. How French borrowing costs can be higher the those for Greece is really quite alarming. Political woes in France to blame, as Barnier does what he can to avoid a collapse of his government that is only a few months old, including a promise not to raise electricity prices, a key demand of Le Pen’s National Rally.
Spurs drew with Roma last night, it looked as though they may just cling on to their slim lead but Roma had so many chances it seemed only a matter of time until they equalised, and they duly did with just seconds left on the clock. Spurs really must take chances when they get them. Man Utd gave new manager Amorim his first win with victory over Bodo/Glimt.
Spurs take on Fulham at the weekend, Chelsea v Aston Villa could be good but the highlight should be Liverpool v Man City on Sunday. Two great teams with very different run of form, Liverpool flying and Man City facing a fourth straight Premier League loss.
England’s cricket team are putting up a decent fight down in New Zealand. The Kiwis were all out for 348 and by the end of day two England were just 29 runs behind with five wickets still remaining. Could be exciting but not enough to get me out of bed in the middle of the night!
By the time you receive my next report we’ll be in December, indeed Christmas will be just over three weeks away. There are still some thinking it’ll be calm from here but I’m not so sure., Next week brings US employment numbers and PMIs, the following week brings rate announcements from RBA, BoC, SNB, ECB as well as US inflation, the next week will be no easier with PMIs, UK inflation and both BoE and FOMC rate announcements and US PCE and GDP. All that while we’re hoping Putin doesn’t escalate his attacks Ukraine, which unfortunately at the moment looks more than possible.
So, enjoy the weekend as and when it comes, it looks like it should be a bit milder over the next few days. Black Friday sales are well and truly here, fortunately they now last longer than just one day but somehow most things I look at are actually not one of the items on sale. Still not pulled the trigger on the car insurance, although have got it down to a bargain £2,200 so far. Yikes.
Have a great day
- 10.00 EU HICP
- 10.03 UK BoE financial stability report
- 11.30 ECBs de Guindos speaks
- 12.00 INR GDP
- 13.00 ECBs Nagel speaks
- 13.30 CAD GDP
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