Quiet markets despite data

It looks like traders had a night off. There was data and some of it ought to have been market moving but the market didn’t move. Sterling trickled higher in most areas. GBPUSD is up to $1.4165 and GBPEUR is in the €1.1625 region.

GBP makes marginal gains

There were small advances in other GBP-based exchange rates too but nothing dramatic. Sterling is undoubtedly being suppressed by fears of a delay in the June 21st target for unleashing the economy. It is hard to make sense of the covid data that supports these fears. Some reports say hospitalisations are up but the numbers of deaths are mercifully still falling and at a very low level. At what point do we accept that this will be with us for keeps and determine that Britons have suffered enough economic pain? I don’t have an answer but everyone and his donkey have an opinion.

Sterling is also being held back by some shenanigans with the EU as brinksmanship over the trade negotiations continues to write its headlines.

Overnight news included a 5.2% drop in Australian consumer sentiment, lower than forecast. The Reserve Bank of Australia also commented that inflation won’t reach a normal 2-3% range until 2024.

Chinese inflation data was released and that was a little below par. Also, the announced drop in German imports and exports was worse than forecast. ‘Meh’, said the markets, and on we go. The rest of the morning is likely to be a little lacklustre too. We lack heavyweight data from the UK or EU. However, the afternoon promises to be a lively one.

As well as a swathe of mortgage data from the US, we will also see their wholesale inventory data, including crude oil. That has been a market mover for the USD. Add in the whole matter of the pattern for US interest the Federal Reserve’s attitude to tighter monetary policy and there is plenty of scope for excitement.

Bank of Canada in spotlight – change may be in the wind

The Bank of Canada will be leaving its base rate on hold this afternoon. Of that most would agree but they may suggest some tweaking if their overall monetary policy stance. So the Canadian Dollar is ripe for volatility. GBPCAD starts Wednesday at C$1.7140; a very familiar level indeed.

That’s about all there is to comment on this morning. The story that made me laugh most this morning is that of Gemma Hill, whose personal trainer suggested she take some honest ‘before’ pictures of herself in her underwear to give her a comparison for later on. What he didn’t ask her to do was send them to him. Misunderstanding the instruction is what Gemma did. His response is beautiful. “I don’t ask clients to send me pictures in underwear. I was eating dinner with my girl she’s quizzing me ‘who is this chick”.

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