Good morning
Risk sentiment continues to turn sour, the Afghanistan crisis is clearly the main headline, the speed with which the government collapsed has shaken the worlds leaders who are only able to look on helplessly. As we have seen recently, lower risk sentiment has been met with US dollar buying. Feds Rosengrens comments that he’s like to see tapering in Autumn but certainly this year didn’t really serve to push USD any higher, given this seems to be the favoured scenario for now. US retail sales today very much in focus
UK unemployment this morning was pretty much in line with expectations, if anything slightly better, but this could not stop GBP getting sold off with GBPUSD trading from 1.3830 to 1.3790, it has since made its way just back above 1.3800, while EURGBP traded up to 0.8530 (GBPEUR 1.1725). EU GDP numbers out later this morning, while UK inflation numbers will be released early tomorrow morning.
One case of Covid has been discovered in New Zealand which has sent NZD sharply lower, NZDUSD trading from 0.7050 to 0.6910. This in turn has sent AUDNZD higher from 1.0420 to 1.0540. RBNZ rate meeting tonight and the idea of a 50bps raise seems well and truly of the table. It may seem incredible that one Covid case has been regarded as so significant but I guess it is the fact it is a ‘community case’ rather than from a traveller suggests more cases could be expected. AUD is also lower against the US dollar as RBA minutes made it clear that they would act if more Covid outbreaks presented significant setbacks for economic recovery.
I wonder if it is deliberate, but Covid news seems to be making fewer headlines despite some rather alarming facts. I note that five US states are seeing records numbers of new Covid cases and increasing hospitalisations. It was a pleasure to see full football stadiums at the weekend but I wonder what this means for Covid cases, surely we have to see case numbers jump as a result of thousands of fans sitting together, and more importantly travelling together in busy trains. I know our restrictions have been lifted but I was still a tad surprised to wander around Tescos yesterday to see very few people wearing masks. The next wave could be big, although I have said many times the key is not whether case numbers increase and not even whether people become ill, it is more about how many hospitalisations there are and how quickly those people can be treated. Fingers remain firmly crossed.
I’m now off for a few days. Typically it is raining here at the moment, I don’t mind if it’s not 30 degrees but please at least be dry, surely that is not too much to ask for? Before then we have a second training session with the young Hares. Our step up to under 15s means we move to size 5 footballs, the size adults play with. I’ve got a set of brand new balls pumped up and ready to go in the garage, can’t wait to get them onto the training pitch.
I have attached a summary of the economic releases coming up through the rest of the week, quite a full calendar actually so be on your toes.
Tuesday
- 10.00 EU GDP
- 13.15 CAD housing starts
- 13.30 US retail sales
- 14.15 US industrial production
- 15.00 US business inventories
- 23.45 NZ PPI
- 00.50 Japan trade balance
- 02.30 AUS wage price index
- 03.00 RBNZ rate announcement
- 04.00 RBNZ press conference
- 07.00 UK CPI, RPI, PPI
Wednesday
- 07.00 UK CPI, RPI, PPI
- 10.00 EU CPI
- 13.30 US housing starts, building permits
- 13.30 BoC CPI
- 19.00 FOMC minutes
- 02.30 AUS unemployment
Thursday
- 09.00 EU current account
- 13.30 US initial jobless claims, Philly fed manufacturing survey
- 00.01 UK GfK consumer confidence
- 00.30 Japan CPI
- 02.30 PBoC rate announcement
- 07.00 UK retail sales
Friday
- 07.00 UK retail sales
- 13.30 CAD retail sales
- 20.30 CFTC position data
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