Good morning
What a weekend, sun was shining, bringing wonderful warmth if you’re out of the shade, of course the clear skies meant quite terrific frosts each morning but it’s such a joy to see some proper daylight compared to the dull and dreary conditions we seem to have since the turn of the year.
Dull and dreary were not words to describe Trump’s meeting with Zelensky on Friday. Neither individual are particularly good statesmen, their arguments should take place behind closed doors. I do see both sides to this, Zelensky should know how to play Trump better, but I understand why he is hugely displeased with Trump’s almost U-turn on support for Ukraine, even to the extent he looks more friendly with Putin and blames Ukraine for being invaded. Now, perhaps there is some truth that the invasion could have been avoided had Ukraine just given up large swathes of land, or even the entire country, to Russia at the outset. But that does not mean Ukraine are to blame for being invaded.
Also a lot is made of how much Zelensky is earning out of the aid provided, something I read suggested he earned some $11m/month and owned huge properties in the US. Who is to say whether that is true or not, I certainly cannot claim to have the facts. But regardless, I am pleased to some extent that Zelensky has not signed a deal with US to give away the mineral reserves in Ukraine. Trump is now in the unfortunate position where he has almost guaranteed peace in Ukraine without achieving anything close to peace. He will not look strong in Putin’s eyes, having failed to cajole Ukraine into surrendering, and also having had a leader of a country have a shouting match in the White House. Bad form all round.
Where this takes us remains to be seen. Has Putin, through the Ukraine war, managed to drive a wedge between Europe and the US, something that really weakens both sides and therefore can only benefit Russia. Can Ukraine survive with just European support, could there ever be a peace deal without a guarantee that Russia won’t invade again, and how would such a security blanket even come into effect? European troops on the ground? I cannot see an easy path to peace.
Anyway I am certainly not educated enough in either Eastern Europe or general politics to write any more on the subject here. Instead I’ll turn attention to the currency markets which have actually been pretty stable. GBPUSD is currently holding just under 1.26, EURUSD is just below 1.04, which takes GBPEUR a touch above 1.21. USDJPY is back above 150 having spent some time in the mid-148’s last week. GBPJPY is 189.00, GBP looking well bid in other crosses with GBP at 2.0250, 2.2470 and 1.8175 against AUD, NZD and CAD respectively. USDCAD is 1.4440, USDMXN 20.52, the lack of tariff talk for now means neither pair has yet seen the spikes we saw at the start of February.
A busy week this week in terms of economic data from the US and EU, not so much for the UK. We have EU inflation this morning, retail sales Thursday and also the latest ECB rate meeting where a 25bps cut to 2.65% is expected, while on Friday we have EU GDP numbers. From the US, ISM PMIs today and Wednesday, with employment numbers including ADP, Challenger and then the main event, the nonfarm payrolls on Friday.
In other news of note, a word of warning. I received in the post over the weekend a letter from Hertfordshire Police, a speedwatch letter which claims they had caught me on camera travelling over the speed limit. The letter went on to say that had a police officer been present I could have been prosecuted. Which means that the equipment used must have been operated by non-Police, ie other citizens. Now, I have seen people speeding and thought how I’d love them to get caught, but please don’t let our country turn into one where our own neighbours are spying on us. However, i do know of course that it’s not clever to break the speed limit.
That’s about all from me this morning. Have a great day….
- 10.00 EU HICP
- 14.30 CAD S&P manufacturing PMI
- 15.00 US ISM manufacturing PMI
- 18.00 Feds Barkin speaks
- 21.45 NZ building permits
- 23.30 Japan unemployment
- 00.30 RBA minutes
- 00.30 AUS retail sales
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