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  • richard evans

Welcome to H2 2023

Good morning

Welcome to H2 2023. Asian markets have started the second half of the year on a positive note following month-end gains in Europe and US Friday. GBPUSD currently 1.2670, EURUS 1.0880, GBPEUR 1.1645.

USDCNY fixed a touch lower at 7.2157 although USDCNY is trading higher than that, China officials doing their best to reign in CNY weakness. USDJPY is at 144.80, testing new highs and also testing the resolve of Japanese officials who have so far relied on verbal intervention to prevent yen losses. GBPJPY is 183.55, I do note that UBS technical team are turning neutral on USDJPY fearing a reversal but they have not gone as far as going short.

RBA rate announcement due in the early hours of tomorrow morning, a 25bps rise to 4.35% is expected this time after two surprise rate rises at the two recent meetings. This is certainly not a foregone conclusion though, many seem to be thinking RBA could leave rate son hold this time. GBPAUD currently up at 1.9075. This is quite a weak level for AUD particularly as a review of economists in Oz sees a peak rate of 4.6% and no rate cut until at least May 2024. Could see volatility around the release tomorrow morning.

Otherwise there is little really of note from the currency markets. It is a US holiday tomorrow, Independence Day, always reminds me of the corniest speech ever from the film ‘Independence Day’ by the US President as he is about to board his jet fighter to battle aliens. Definitely worth a watch if you haven’t seen it, I’m sure they’ll be showing it over the next day or so.

There was plenty of focus over the weekend on water companies, this is turning into a bit of an obsession for me. The debt levels is staggering, the billions paid to shareholders is staggering, the lack of investment or oversight is staggering, and the amount of raw sewage deliberately leaked out is equally staggering. And you know we, the public, will be the ones paying higher bills and someone needs to pay for this. I’m surprisingly unhappy about this.

Many people were equally unhappy about one decision in the Ashes cricket yesterday when Bairstow was given ‘out’ after having walked away from his crease thinking the over was finished, but instead got stumped by the Aussie wicket keeper. The crowd were outraged, fans and pundits everywhere saying it was against the spirit of the game. Unfortunately I think it was something of a naïve error from Bairstow who should be more aware of whats going on. Anyway, England lost the match to put them 2-0 down in the series which has so far seen some excellent cricket. I hope this series will not be remembered by that one incident, I fear however that it will.

A potentially quiet afternoon, with US out tomorrow, I’d expect many of them will have turned this into a long weekend. Looking at the sunshine already I’m beginning to think we should all do the same…….

- 09.00 EU manufacturing PMI

- 09.30 UK manufacturing PMI

- 13.00 ECBs Nagel speaks

- 14.45 US manufacturing PMI

- 15.00 US manufacturing ISM

- 23.00 NZ NZIER business confidence

- 05.30 RBA rate announcement

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