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August

Sterling stays stock still

Published: Monday 20 August 2018

  • US Dollar stable as China - US trade deal edges closer
  • Central bankers rule the day
​​By David Johnson

China-US deal edges closer
 
The Trade dispute between China and the US may have a solution emerging on the horizon and the markets took that as a very positive sign. Wall Street’s equities indices closed higher on Friday, even as the US President is being corralled into explaining the Russian connection in the last election. Nevertheless, the US Dollar is stronger and there is a lot of talk around the markets of the GBPUSD rate falling further. That doesn’t mean it will happen without a catalyst of some sort, but it is a potential outcome.
 
Euro and Turkish Lira stabilise
 
The Turkish Lira has stabilised a little in spite of the credit ratings agencies shifting Turkish sovereign debt into the dustbin section of the ‘Junk bond’ zone. That has allowed the Euro to stabilise as well, but there is plenty of volatility ahead as the UK–EU Brexit negotiations continue. It may be that the markets have woken up to the fact that people says things they don’t mean during negotiations. The prevalence of ‘no deal’ rhetoric is a case in point. No negotiators really want to be considered a failure, so a deal of some description is the most likely outcome.
 
Central bank speeches a-plenty
 
Today’s calendar includes speeches from members of the Bank of Canada, US Federal Reserve, Bundesbank and Reserve Bank of Australia (RBA). That theme continues tomorrow with the release of the minutes from the last RBA meeting and a speech from the RBA governor. The minutes from the last US Federal Reserve meeting are released on Wednesday.
 
Tales of the unexpected
 
There is a little data due in between these central bank events, but that is limited, as it often is at this time of the month. So traders will be looking for unexpected triggers for market movement.
 
And ‘unexpected’ is definitely a word you could use for events at the Southers Marsh Golf Club in Plymouth, Massachusetts, over the weekend. After a heated argument over a game of golf escalated into one player biting the other player’s finger off. That’s strange and violent, but he was charged by the police with ‘Mayhem’. Now, that is a cool crime to be charged with. So much more creative than ‘Actual bodily harm’.
Some jokes from the Edinburgh Fringe
 
Working at the jobcentre has to be a tense job – knowing that if you get fired, you still have to come in the next day. Adam Rowe

I took out a loan to pay for an exorcism. If I don’t pay it back, I’m going to get repossessed. Olaf Falafel

In my last relationship I hated being treated like a piece of meat. She was a vegan and refused to touch me. Daniel Audritt

I’ve got a new job collecting all the jumpers left in the park at the weekends, but it’s not easy. They keep moving the goalposts. Darren Walsh

Trump said he’d build a wall but he hasn’t even picked up a brick. He’s just another middle-aged man failing on a DIY project. Justin Moorhouse

Why are they calling it Brexit and not The Great British Break Off? Alex Edelman

Today's Major Economic Releases

Market BST Data/Event Previous Expected
AUD 15:30 Australia: Conference Board Leading Index 0.1% 0.1%
USD 16:00 Federal Open Market Committee Member Bostic Speaks    
AUD 23:00 Reserve Bank of Australia Governor Lowe Speaks    
NZD 23:45 New Zealand: Visitor Arrivals -3.5% -3.5%

For more information, infographics and the latest currency insights, visit www.halofinancial.com/news