Good morning
Today marks the 23rd anniversary of the terror attacks in the US that, in my opinion, really changed both the economical and geopolitical environment across the world. My thoughts are with anyone involved or affected by those horrific events.
We saw further USD strength yesterday helped in part by a bout of negative risk sentiment that sent equities lower and led to a flight to safety in the currencies. GBPUSD traded down to 1.3050, EURUSD to 1.1015, not huge moves on the face of it but the lowest levels in those pairs since around mid-August and certainly below pre-nonfarm payroll levels. By the London close we were off those lows by just a few points.
Overnight we had the long-awaited US Presidential debate between Trump and Harris. I didn’t stay up to watch it, but have seen enough clips to know that neither candidate really crowned themselves in glory even though they would probably both claim to have done so. I say again, 350 million people and this is the best they can come up with. Worrying.
USDJPY dropped overnight reaching as low as 140.70 as BoJ official Nakagawa offered some pretty hawkish comments, suggesting rates were currently extremely low and that they should rise if the economy and inflation move in line with the bank’s forecast. These were the lowest levels we’ve seen in 2024 to date.
The USD selling did have an impact across the board, with GBPUSD trading up to 1.3110 before the release of UK’s July GDP number. That came in at a disappointing 0% (expected 0.2%) and with a poor industrial production number (-1% vs 0.2% expected) GBP rightly fell back, reaching 1.3080, while GBPEUR also shifted a few points lower from 1.2865 to 1.1850 or so.
In football, England managed a 2-0 win against Finland, Harry Kane scoring both which seemed fitting on the day of his 100th cap. It was another functional rather than outstanding team performance against a team ranked 37th in Europe but hey, a win is a win I guess. Interim manager Carlsey is set to continue his role, with some already suggesting he should be given the job on a permanent basis.
Today we will enjoy the latest set of US inflation numbers. Friday’s nonfarm payrolls failed to help the markets work out whether we will see a 25bps or 50bps cut from the Fed next week, perhaps this release will give a clearer idea of which way they may choose to go. Real potential for a bit of volatility on this release. Other than that the diary is clear today.
I relented yesterday and put the heating on, just for an hour to take the chill out of the place, I’d tried taking my own ‘just put a jumper on’ advice but it just wasn’t enough. A pretty poor show given we are not even half way through the month! I stepped outside yesterday evening and it felt like a real winters night, dark, cold and wet. The forecast suggests it could get a bit warmer into next week, I really hope so.
Have a great day
- 13.30 US CPI
- 02.00 AUS consumer inflation expectations
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