Good morning
It was something of a quiet day yesterday and the overnight session was also pretty stable, no real surprise given the main events start today. It’s a pretty packed calendar today with plenty of data from the EU and the start of the US jobs data releases that culminates in Fridays nonfarm payrolls. Its JOLTS job openings today. Overnight, Aussie inflation is out, followed by the BoJ rate announcement. Timings is always a bit of guesswork but expect something around 3-4am london time.
Looking at Yen first, USDJPY had been up at 162.00 in early June before weak US data sent the pair lower, helped we believe by official Yen buying from Japan. Since then the pair has seen pretty consistent selling which saw it hit 152.00 late last week, helped by a combination of possible intervention, position unwinds, lower risk sentiment and speculation of a BoJ rate rise. However, as I type we are trading up at 155.00 as the market fears it may have got ahead of itself on the rate move front. I have also suspected that Japan may have been intervening in small clips through the month and I wonder whether this has stopped. Anyway, USDJPY 155.00, GBPJPY 199.30 and EURJPY 167.80.
In the UK, Chancellor Reeves did indeed highlight the funding black hole and announced some cuts to help fill the shortfall, including the removal of winter fuel payments to certain pensioners and also removing the cap on an individuals social care spending that was due to be introduced in 2025, among other things. Higher wage agreements with teachers, armed forces and junior doctors, aimed at both retaining staff and attracting new staff do look like wiping out some of the savings.
A new department, Office for Value Money, is created which will look at the effectiveness of public spending. Not a bad idea, I’m sure we all feel that public money is spent far too frivolously without the necessary care and attention we deserve. I’m looking forward to seeing how much the value for money department will cost. Some taxes will rise but we’re not sure yet which ones they will be. Corporation tax and tac on dividends is my guess. 30th October is the budget day.
GBPUSD is holding pretty well around 1.2850 and GBPEUR is off its lows, now 1.1875. Not much change in the crosses, GBPAUD 1.6900, GBPNZD 2.1800 and GBPCAD just short of 1.7800. EURUSD is 1.0825 ahead of the data releases from the Eurozone this morning.
In other news, obviously the horrific attack in Southport is high in the headlines, there is little I can add to anything that has already been said in the press, save to say it is a stark reminder of how fragile our lives are and how they can be changed forever in just a few seconds. Our thoughts are with all those affected.
In the Olympics, having said I wasn’t overly interested, it is on in the background and yesterday we were treated to as stunning display by Tom Pidcock in the mountain biking, grabbing the lead with an audacious overtake late in the race, having come back from a puncture earlier in the race. Today sees shooting, rowing, table tennis and a bit of beach volleyball. We won’t have the men’s triathlon, that has been postponed due to the poor water quality in the Seine. I’m really surprised the French relied on the Seine for the event, I know on paper it’s a great idea but there must be a lake or reservoir nearby that would have been a safe bet. Organisers have even floated the idea of making it just a duathlon if the water wuality remains poor.
That’s all for now but there will certainly be enough to keep us going through the day, and indeed the rest of the week, with EU inflation and FOMC rate announcement tomorrow, BoE rate announcement Thursday and US nonfarm payrolls Friday.
Have a great day, yesterday was a scorcher but today is set to be even hotter, with temperatures here forecast to hit 32°c. Not sure I’ll have time to get out an d enjoy it mind you.
- 09.00 German GDP
- 10.00 EU GDP, consumer confidence
- 13.00 German HICP
- 14.00 US house price index
- 15.00 US JOLTS job openings, consumer confidence
- 23.45 NZ building permits
- 00.50 Japan retail trade
- 02.30 AUS CPI
- 02.30 China NBS PMIs
- 03.00 (approx.) BoJ rate announcement
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