- US data is all we have today
- Brexit plans overshadow Europe
By David Johnson
Preparations for a ‘no deal’ Brexit are continuing apace in the UK and Europe. The UK Prime Minister has said that ‘no deal’ is not the end of the world but Sterling traders are clearly not entirely convinced, hence the Pound is starting for a low in the foreshortened week.
US data is all we have today
This afternoon sees the release of the US consumer confidence index, which should be a little weaker than last month. We are also likely to see the US trade deficit widen a little. The Dollar, though, is more likely to take its cues from politics. An agreement between the US and Mexico on trade has been predictably described as ‘incredible’ by the US president as he seeks to bury the tri-partied North American Free Trade Agreement (NAFTA). Canada will have to forge its own agreement with the US. We will see on Thursday whether the wrangling over that NAFTA agreement has harmed the Canadian economy. The forecasts for Q2 Gross Domestic Product (GDP) growth seem to suggest Canada is suffering.
Sterling is likely to be vulnerable this week; the UK data diary is as empty as the page in Trump’s memoires titled, ‘Things I don’t like about myself’. With so little to focus on, inevitably traders will watch Brexit discussions with interest and even an expected announcement of trade deals between the UK and Kenya, Nigeria and South Africa is unlikely to overshadow that. And Sterling starts the week at a low ebb; hovering just above €1.10 and unable to get back above $1.30 despite the US Dollar’s weakness.
Brexit plans overshadow Europe
There is a fair amount of Eurozone data this week but this too is being overshadowed by ‘no deal’ Brexit plans and the anger of Italian politicians who may disrupt the EU budget in protest over the lack of support for Italy on migrant costs and implications. This week has started on a positive note for the Euro after strong German business sentiment surveys. They were published yesterday while the UK was on a public holiday.
And you are probably as disappointed as I am that we missed the world gravy wrestling championships. They took place in Burnley, Lancashire yesterday and, I suspect there are contestants all over the North of England still trying to get gravy out of their crevices. Sounds like a fantastic laugh and not at all fetishistic.