Who on earth is Doctor Congo?
Much merriment in the Evans household yesterday. My youngest son downloaded a game to his phone, along the lines of Risk, where you own a country and try to expand your empire by attacking other nations. He’s getting the hang of it and yesterday over dinner he announced that he had attacked successfully Doctor Congo. Silence fell around the Evans table as we tried to work out what he was thinking. Of course, in the game, the Democratic Republic of Congo is shown as DR Congo. He presumed ‘DR' stood for ‘Doctor’. As I am writing this I wonder whether perhaps you had to be there, its possibly not quite as funny this time round, but it certainly has us in stitches.
England play their last group match this evening knowing they have already qualified for the knockout stages, even if they finish third in the group. That takes some of the pressure off. There are various permutations as to who England could play next depending on the results of the final group stage matches. There had been some thinking that England would do well to finish second in order to avoid the winner of Group F, which could be France, Germany or Portugal, but I’d imagine they will go out trying to win rather than worry about the next stages. We hope for a better performance than last Friday.
USD – A bit of an odd day yesterday as the US dollar lost much of the post-FOMC gains, equities put on a solid performance, even though yields pushed higher. Something isn’t quite right. We have heard from a few Fed officials already. Powell was suitably benign on inflation although did note the improvement in the economy, as did Kaplan, not really a surprise to hear bullish talk from him. Williams on the other hand a little more guarded. More Fed speakers through the rest of the week, Powell is up again today and although the text of his speech has already been released there will be a Q&A session which could delve deeper into his current thinking.
EUR – By mid-afternoon yesterday EURUSD had managed to creep back above 1.19, reaching 1.1920 as the US dollar gave back some gains. It currently trades at 1.1905 and as usual I see little in the way of Euro news likely to affect the single currency, instead being at the mercy of the currencies it is traded against.
GBP – A pretty good day for GBP yesterday, GBPUSD trading up from 1.3785 to around 1.3935. it has slipped back to 1.3900 but it does feel a lot more comfortable now than yesterday morning. While some of this move can be put down to the dollar weakening, it must be noted GBP made gains against other currencies as well. EURGBP traded down from 0.8600 (GBPEUR 1.1630) to 0.8550 (1.1695) although now sits 0.8575 (1.1660), while GBPAUD moved from 1.8370 to above 1.8500. No major data releases today, PMIs tomorrow but market seems to be waiting for BoE Thursday.
- 10.15 ECBs Rehn speaks
- 15.00 US existing home sales
- 15.00 EU consumer confidence
- 15.00 ECBs Lane speaks
- 15.30 Feds Mester speaks
- 16.00 Feds Daly speaks
- 18.30 ECBs Schnabel speaks
- 19.00 Feds Powell speaks
- 00.00 AUS commonwealth bank PMIs
- 00.50 BoJ minutes