New ‘horrific’ Covid variant sends chills through markets

Investors are spooked by the discovery of a new Covid-19 variant (B.1.1.529) that could resist current vaccines. From noon today until at least 4 am on Sunday, the UK has banned all flights from South Africa, Namibia, Lesotho, Botswana, Eswatini, and Zimbabwe.

Chinese quarantines disrupting shipping

China is so concerned about re-importing covid that they have placed 7-week quarantine restrictions on ships’ crews coming ashore in Chinese ports and not allowing crews to come ashore, even for medical emergencies if the ship is leaving with the same crew.

ECB rate hike expected on 22nd December

The purchasing managers' indices from across the eurozone and in the UK were largely in positive territory yesterday. Hence the GBPEUR exchange rate traded in a fairly narrow range with €1.1875 at its centre.

Reappointment of Fed Chair boosts USD

President Joe Biden will give a speech on the economy and combating inflation on Tuesday as markets await his decision on the next Federal Reserve chair and possible moves to bring down U.S. energy prices.

Biden to speak on inflation and Fed decision

President Joe Biden will give a speech on the economy and combating inflation on Tuesday as markets await his decision on the next Federal Reserve chair and possible moves to bring down U.S. energy prices.

French unemployment rising

Most countries are seeing their unemployment rates lower in the post-lockdown phase of covid but French unemployment rose again in Q3 to 8.1%. Amidst all the warning signs for the European Central bank, this is just another one to add to the pile.

Sterling rips higher on housing and inflation

It is underplaying it to use an expression like ‘storm in a teacup’ for the behemoth $60 trillion Chinese property market’s troubles but there is a good chance it won’t blow up in the way many were fearing a month ago.

US dollar rallies but the pound holds firm

The GBPUSD pair shot to one-week highs, around the 1.3470-75 region in reaction to hotter UK consumer inflation figures, albeit quickly retreated a few pips thereafter. The pair was last seen trading just above mid-1.3400s, still up around 0.25% for the day.

UK unemployment rate down to 4.3%

UK employment rose by 160,000 to a higher level than in February 2020 (before covid) in September, bringing the unemployment rate down to 4.3%; the best since September 2020. That gave the Pound a boost this morning after hints from the Bank of England that higher interest rates are on their way.

Japanese GDP down but markets fail to react

Japan’s economy shrank by 3.0% in Q3 as a microchip shortage and covid disruption halted a lot of activity and brought annualised growth down to 3.0%. We also saw a drop of 7.3% in capacity utilisation and a 5.4% drop in industrial production.

USD index – strongest gain since June 2020

After a lively start to the week, Thursday was quieter and Friday looks like being a bit of a squib of the damp variety. Many markets were closed to mark the WW1 Armistice, so the volumes were down but so was the volume of data to drive activity.

AUD slips on spike in unemployment rate

The Australian dollar lost ground overnight after the Australian unemployment rate spiked higher in October. A delayed recovery post-lockdown meant the unemployment rate rose to 5.2% from 4.6% in September.

Fears of Chinese property market contagion weaken Australasian dollars

You know those slingshot things; the ones where you are strapped in and flung into the heavens before being whipped back down by bungee cords and the up and down again? That’s what the Pound looks like on the charts right now.

EUR to underperform the USD in months ahead

Central banks are front and centre in the perception of foreign exchange markets players right now. However, there are other stories to be aware of. For example, since May, we have seen a 26% drop in the index of China’s Dollar junk bonds (a very popular investor tool) which is heavily influenced by the property sector. That decline accelerated yesterday.

Chinese property developer problems infect other markets

Central banks are front and centre in the perception of foreign exchange markets players right now. However, there are other stories to be aware of. For example, since May, we have seen a 26% drop in the index of China’s Dollar junk bonds (a very popular investor tool) which is heavily influenced by the property sector. That decline accelerated yesterday.

Sterling has a dead cat bounce after BOE inaction

I must admit I was surprised that the markets were surprised that the Bank of England didn't raise interest rates when they met this week. Sterling fell like a stone from Wednesday into Thursday and then stops dead.

China’s property bond abyss gets deeper

Aside from what’s happening – or not – in Glasgow, the other two big stories are the worsening situation in China’s financial markets and the re-emergence of the US economy from ultra-loose monetary policy.

NZ unemployment down to 3.4% – lowest since 2007

Monday was a day of strong purchasing managers surveys. We had very positive data from New Zealand overnight, the unemployment rate fell to 3.4% down from 4.0% in the previous month and the lowest level since 2007’s record low. There was also a 4.3% rise in global dairy trade prices.