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  • richard evans

USD lower on comments from Bill and Bill

Good morning

In the absence of any major economic data, it was a bit of a non-day for much of yesterday with much of the time spent waiting for news headlines from Israel to see what the next stage of the crisis there brings. A late afternoon USD sell-off however got things more interesting, GBPUSD rallied from around 1.2150 to 1.2250 into yesterday evening, and that USD weakness has continued with the pair now up at 1.2285. A mildly better than expected set of UK unemployment numbers also helped GBP push a little higher this morning. EURUSD followed suit, moving from 1.0590 to 1.0675, again that move has continued this morning with EURUSD now 1.0690. GBPEUR is up at 1.1490, unable so far to regain 1.1500.

The USD weakness also helped USDJPY slip off the highs and as I type it it taking another leg lower moving from 149.75 to 149.35 pretty quickly. The USD sell-off seems to have been triggered by comments from two Bills, firstly Bill Ackman, a billionaire investor, who said he has unwound his short US bond positions amid residing global risks, and then Bill Gross, the co-founder of Pimco, who said he is eyeing an economic downturn and has bought short dated SOFR futures to reflect this view.

Hamas have released two more hostages, I think this brings the total to four now. Negotiations are continuing for release of a larger group although I would not be at all surprised to see Hamas drawing the torrid saga out by continuing to release hostages very slowly. Israel are still intent on eliminating Hamas completely. If Hamas released all hostages in one go, I’d imagine Israel would be more inclined to put their ground offensive in place. China foreign minister Wang has said that Israel has the right to defend itself. Wang is due to visit Washington this week. US has warned that Iran are looking to escalate the conflict, with Iranian backed militias increasing attacks on US assets in the region.

Bitcoin has had a strong rally this week. As you know I am not a fan of anything crypto but I do keep an eye on prices from time to time. It started the week just around $30,000, has traded as high as $35,000 before slipping back a little to $33,750. As always it is difficult to know exactly what triggered the move, some suggestions it comes after a court ruling in favour of Gravscale Investments who look to introduce an exchange traded fund based on Bitcoin.

EU, UK and US PMIs take centre stage today, while overnight we will have Aussie inflation numbers. GBPAUD traded up to 1.9335 overnight, the highest level since mid-September. It has since dipped back to the mid-1.92s, AUD demand seems to be coming from AUDNZD buying , that pair is now up at 1.0860, having been in the 1.06s earlier just a week or two ago.

A quick peek at the Premier League sees Spurs topping the table after beating Fulham last night. This, apparently, is their strongest start since their league title win in 1961. Ah, we can but dream. Dreams turn to a nightmare though if you look at the cricket world cup table, where current holder England are now bottom of the ten teams after Afghanistan beat Pakistan yesterday. South Africa v Bangladesh today. Just as well its not being played here as it looks like a week or two of rain from now on.

- 09.00 EU manufacturing, services PMIs

- 09.00 RBAs Bullock speaks

- 09.30 UK S&P manufacturing, services PMIs

- 14.45 US manufacturing, services PMIs

- 01.30 AUS CPI

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