Good morning
US equities struggled yesterday and Asian markets were also generally lower, the usual mix of inflation, US debt ceiling, uncertainty over China, high energy prices and supply chain issues mostly to blame. Oil prices hit multi-year highs as OPEC fails to meet calls to increase production. WTI crude trades to almost $78.00, we have to go back to Nov 2014 to see prices at these levels. Brent crude trades at $81.50.
Eurozone ministers are convinced inflation will fall into 2022 and have done a reasonable job of keeping EUR from making gains, with EURUSD still holding around 1.1600. Lagarde speaks later today, quite likely she’ll continue with a similar theme. GBP meanwhile holds the gains it has made since its mini-crash last week, GBPUSD now 1.3610 and EURGBP at 0.8525 (GBPEUR 1.1725).
WhatsApp, Instagram and Facebook all faced outages yesterday. The outage affected the main services but also employees work passes, which apparently meant the outage lasted longer than it should have as those trying to fix it couldn’t actually access the building. Fortunately the younger generations still seemed to be able to function despite the loss of vital social media applications, all credit to them!
RBA kept policy unchanged at earlier today, making it clear asset purchases would remain the same through to at least Feb 2022 but did sound slightly positive on the economic recovery, saying the recent setback is likely to be temporary and should bounce back once restrictions are lifted and vaccination numbers increase. RBNZ rate announcement due tonight, they are widely expected to lift interest rates by 25bps to 0.5% so such a change shouldn’t bring too much of a move in NZD, however the statement will be of interest going forward. Some had been looking for a 50bps rise but the recent increase in Covid infections and lockdowns have made this a lot less likely. NZDUSD currently 0.9650 with AUDNZD 1.0455, NZD just a touch stronger than its overnight levels.
China has sent 56 military aircraft into Taiwan airspace, the largest incursion to date. US don’t like it, Taiwan doesn’t like it, but China says they are determined to retain their sovereignty. I really don’t like where this is heading.
Microsoft Windows 11 launches today, not much in the way of a fanfare over this launch. I was never a real fan of Windows 10, I don’t like the tiles that come up when you press ‘start’. At a first glance, Windows 11 seems to be more like a smartphone layout, which should please many users. It’s a free upgrade but I won’t rush into it, wait for the bugs to be sorted out. For those who don’t like change, Windows 10 will continue to be supported until 2025.
Finally, the Pandora papers continue to tell us how many rich people own property in London. I just cannot understand why anyone is surprised. A lot of talk over recent years has been about how Russian, Arab and some Chinese money has flooded into UK property. That they didn’t pay the same tax that you or I would pay is also not a surprise. Still, it makes quite an interesting read.
- 09.00 EU markit services PMI
- 09.00 Norges Banks Olsen speaks
- 09.30 UK markit services PMI
- 10.00 EU PPI
- 13.30 US goods trade balance
- 13.30 CAD International trade
- 14.45 US markit services PMI
- 15.00 US services ISM
- 16.00 ECBs Lagarde speaks markit services PMIo
- 18.15 Feds Quarles speaks
- 02.00 RBNZ rate announcement
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