Good morning
Weaker US ADP numbers and a revision lower to the previous months reading, as well as a weaker ISM services PMI number, sent USD lower yesterday afternoon and although there was a bit of a USD recovery ino the evening, we have seen further USD selling this morning which take GBPUSD to 1.2735 and EURUSD to 1.0540.
GBP remains strong against EUR, GBPEUR is currently at 1.2080 but I have to say I am surprised we didn’t see a strong EUR reaction to the collapse of the French government. Macron will now have to find a new PM but I don’t see how anyone could satisfy the French parliament, divided as it is. Macron speaks later this evening.
USDJPY has been chopped around this week, having hit a low around 148.65 on Tuesday it rallied back to 151.20 yesterday, only to fall back below 150.00 this morning, so far reaching a low of 149.65. GBPJPY is around 191.00 after seeing lows on Tuesday just above 188.00. The latest bout of yen strength this morning has been put down to reasonably neutral comments from BoJs Nakamura, who is usually on the more dovish side. He said he sees signs of an economic recovery and even went so far as to say he wouldn’t necessarily oppose a rate rise if data allows.
Both Fed and ECB officials, including Powell and Lagarde, have been talking about patience and preferring to cut rates cautiously, suggesting any rate cuts in December are likely to be 25bps or perhaps even smaller, although there are still some pretty big US banks still looking for a 50bps cut from the Fed this moth, followed by four 25bps cuts through 2025. This weeks nonfarms and next weeks US inflation numbers will be key for the Fed decision.
Bitcoin has broken through the US$100,000 level, reaching a higher around $103,500, after Trump appointed Paul Atkins to head the US financial regulator, the SEC. Atkins is expected to be a bit more pro-crypto, hence the rally.
RBI rate announcement is due in the early hours of tomorrow morning. We have had some decent volatility in GBPINR over the past couple of months. October GBPINR was around 112.00, falling to 105.50 towards the end of November but has since recovered to almost 108.00. Much of this move is downto GBP volatility mind you. Over a similar period we’ve actually seen USDINR gradually tick higher from 83.50 to current levels around 84.71. Rates are expected to be unchanged at 6.5%.
In football, both Chelsea and Arsenal won last night, closing the gap on Liverpool who could only manage a draw, while Man City got their first win in five premier league matches with a solid win over Notts Forest. Spurs play Bournemouth this evening, one of those important matches for Spurs where a win could put them into the top five, while a loss would see Bournemouth move from 13th to 8th, above Spurs in the table. Spurs form has been far too mixed for me to have much confidence.
I missed the football yesterday evening as, at last, I got to see Wicked at the cinema. So, what did I think? Overall, it was pretty good, helped by the fact I do know the soundtrack pretty well. It is long but actually time went quite quickly. This one finished where the interval for the theatre show comes in which leaves the door open for part two which I believe comes out around this time next year. Overall a decent watch and being so long it actually spends a bit more time on some of the important story parts that the theatre show skips over. I’d still take the live performance mind you, but this was not disappointing at all.
Have a great day
- 10.00 EU retail sales
- 12.30 US challenger job cuts
- 15.00 CAD Ivey PMI
- 17.00 BoEs Greene speaks
- 19.00 Macron speaks
- 04.30 RBI rate announcement
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