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Euro recovers as Turkish Lira gains on profit taking

Published: Tuesday 14 August 2018

  • German economic growth picks up
  • UK employment data is key for GBP
​​By David Johnson

There was a small rebound in the value of the Turkish Lira overnight. It looks like profit taking; I can’t imagine it has anything to do with the macho tosh and nonsense coming out of Ankara, but the Lira had become very oversold and a rebound of some description was inevitable. What that has done is allow the Euro to also recover a little and that recovery was helped by an uptick in German economic growth.
Euro recovers on improved German data
German Gross Domestic Product (GDP) grew by 2.3% in the year to June. That was below the forecast, but much improved on last quarter’s 1.4%. We will see the final figure for the Eurozone GDP growth for the same period later this morning and that is expected to confirm 2.1%. More worrying for the Eurozone is that we expect industrial production for June to be down 0.3% and that will concern the European Central Bank (ECB) as it tries to negotiate its way out of a very long standing period of flat data.
UK employment data key to Pound’s fortunes
The UK data this morning comes in the form of earnings and employment numbers. Average earnings came in at 2.4%, lower than estimates of around 2.5%; but crucially above the 2.3% Consumer Price Inflation level. That means disposable incomes are rising. Sterling recovered a little of its losses over the last 24 hours but isn’t breaking any records. However, positive news of the lowest rate of unemployment since the mid-1970s has helped improve the Pound against the Euro and US Dollar.
Away from the data diaries, the Brexit talks continue in London and Brussels, the NAFTA talks continue behind the scenes and the tariff wars continue in the Twittersphere... probably.
All American afternoon
This afternoon’s data is limited and all American in its flavour. Import and export price indices will be accompanied by the crude oil stocks data. The expected changes in import and export prices are expected to be rather subdued and the oil stocks data is expected to show a reduction in stocks and therefore upward pressure on the price of crude oil.
Coherent Commandments

And religious researcher, Dr Rick Strassman, in an interview with the epicentre for research, The Daily Star, has claimed that Moses was possibly suffering the side effects of hallucinogens when he received the Ten Commandments. It’s an interesting theory, but it doesn’t explain why the commandments themselves are so lucid. I would have imagined commandments including, “Though Shalt not ride hippos with clown noses on”, or “Thou shalt not ride paisley camels on pink sand dunes on a Wednesday”, rather than the eminently logical ones we all know and... ahem… adhere to. Nope, no coveting here. No Sireee.
A few Moses Jokes for good measure
What did the doctor prescribe for Moses? He said ‘take these tablets and call me tomorrow’.

How does Moses make tea? Hebrews it.

After 39 years and 364 days of wandering in the wilderness, Mrs Moses finally asked a passer-by for directions.

Today's Major Economic Releases

Market BST Data/Event Previous Expected
GBP 09:30 UK: Average Earnings Index 2.5% 2.5%
GBP 09:30 UK: Claimant Count Change 7.8k 2.3k
GBP 09:30 UK: Unemployment Rate 4.2% 4.2%
EUR 10:00 EU: Flash Gross Domestic Product 0.3% 0.3%
EUR 10:00 German: ZEW Economic Sentiment -24.7 -20.1
EUR 10:00 EU: Industrial Production 1.3% -0.3%
USD 13:30 US: Import Prices -0.4% 0.1%

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