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April

Sterling slides on Bank of England comments

Published: Friday 20 April 2018

  • Sterling hit by Carney comments
  • UK retail sales data disappoints
  • Canadian Dollar benefits from stronger data
​​By David Johnson

Sterling had a fairly torrid Thursday after retail sales data showed a slight slowdown in high street activity when the markets had been expecting a faster growth. At 1.1%, the data wasn’t a complete disaster, but analysts and traders had forecast 2.0% growth; up from last month’s 1.5%. The Sterling-Euro exchange rate is trapped between 1.1350 and 1.1550 and fell towards the bottom of that range before London’s trading close because Bank of England Governor, Mark Carney, scorned the idea of early interest rate hikes in the UK.  The Sterling US Dollar rate is also in a narrow band between 1.4150 and 1.4350 and that too took a tumble when Mark Carney spoke. 
 
US Dollar barely moved – could be a different story after Federal Reserve announcements
 
For its part, the US Dollar was almost stationary in amongst data that hit the forecast almost spot on. This afternoon’s US data is pretty thin on the ground, but we will get speeches from a few Federal Reserve members, so there is always scope for unexpected tips on the Fed’s rate hiking plans.
 
Better time for Canadian Dollar
 
The Canadian Dollar had a better day after the Canadian employment report showed a gain of 42,800 jobs in the non-agricultural sectors after growth of just 32,700 last month. This is very encouraging at a time when the troublesome North American Free Trade Association (NAFTA) trade negotiations are hanging over Canada and the US’s targeted trade tariffs too. We look ahead to this afternoon’s Canadian inflation and retail sales data. Whilst the inflation data is expected to be in line with last month’s 1.5%, most forecasters are looking for a fall in core retail activity, but a small monthly rise in the headline rate. The Canadian Dollar will react if there is a significant shift in that.
 
On this day in history…
 
And on this day in 1862, Louis Pasteur and Claude Bernard began their first tests to create what became known as pasteurisation; a technique that made milk last much longer in the bottle. I apologise, but I can’t hear the word “pasteurised” without thinking of Ernie who drove the fastest milk cart in the west. I know I am showing my age, but I remain unabashed. Have a great weekend.
Clear instructions
 
A grandmother is giving directions to her grownup grandson, who is coming to visit with his wife:
 
"You come to the front door of the apartment complex. I am in apartment 14F. There is a big panel at the door. Push button 14F with your elbow. I will buzz you in. The call button for the lift is large, so push it with your elbow. Go into the lift. The button panel in the lift is on the right. With your elbow, hit 14. When you get out, I am on the left. Hit my doorbell with your elbow when you get here."
 
"Grandma, that sounds pretty straightforward, but why am I hitting all these buttons with my elbow?”
 
"So what; you're coming empty handed, are you?”

Today's Major Economic Releases

Market BST Data/Event Previous Expected
All Day one International Monetary Funds Meetings    
CAD 13:30 Canada: Consumer Price Index 0.6% 0.4%
CAD 13:30 Canada: Core Consumer Price Index 0.7% 0.7%
CAD 13:30 Canada: Retail Sales 0.3% 0.4%
CAD 13:30 Canada: Core Retail Sales 0.9% 0.4%

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