Breaking news *****Football has arrived home*****
Huge congratulations to the Lionesses on securing the 2022 UEFA European Women’s Football Championship top spot. England’s women did it in style too. 22 goals is the most scored by any team in a Euros tournament (men or women), 87,192 people packed Wembley for the game, the largest audience for any fixture there (men or women), there were no reports of violence and it was the first time Germany had lost in a final. Phenomenal. Sadly, it hasn’t lifted Sterling but I think it is safe to say that England’s first major football trophy in 56 years has lifted the nation’s spirits.
Australian inflation up again ahead of RBA meeting
The University of Melbourne – Faculty of Economics and Commerce releases the TD Securities Inflation data overnight and the figure was up again. Australia’s annualised inflation is running at 5.4%. That is quite tame compared to some other industrialised nations but still a little hot for the Reserve Bank of Australia. It is odds-on that they will lift their base rate by 50 basis points when they meet in the early hours of tomorrow morning (UK time) and the AUD traders are prepping for that by pushing the GBPAUD rate down below AUD 1.74 again. As long as this pair doesn’t get much below that, it should still be considered to be in a short-term uptrend but anything below AUD 1.7350 would suggest that trend is over and lower levels should follow. That said, the BOE is likely to lift its base rate again on Thursday. So, any further falls may be short-lived.
Sterling steady ahead of BOE on Thursday
As mentioned above, the markets are expecting the Bank of England to vote for a 25 basis point interest rate rise when they meet on Thursday. Sterling is fairly steady at current levels and that is definitely the highlight of the week. However, as we approach Thursday, traders are likely to be nervous, so don’t be surprised if the Pound slips a little in the first three days of the week. For now, though, GBPUSD is just below $1.22 and the GBPEUR rate is treading water at €1.1920.
Euro on the back foot after poor German retail sales
We can’t be surprised that German retail sales data was poor this morning. The June figures showed an 8.8% contraction on the year; significantly worse than the market’s expectations and that data was accompanied by a Manufacturing Sector Purchasing Managers Index for Germany. That printed at 48.7, well below the market forecasts and below the crucial 50 level, which is the divide between growth and contraction. Based on this data, it could be argued that European Central Bank acted rashly with their recent interest rate rise. Interestingly, the euro hasn’t declined significantly since that data but it is slightly weaker against both the pound and the US dollar. GBPEUR is currently €1.1920 and the EURUSD rate is at $1.0225.