- USD stronger on Federal bank’s bullishness
- Mixed Canadian retail sales data expected
- Upbeat New Zealand retail data expected overnight
By David Johnson
I guess it was inevitable it would be said as soon as the National Rifle Association (NRA) managed to have a word with the President. In the wake of yet another high school massacre, the President’s latest pronouncement is that issuing yet more guns - to teachers this time - is the answer to the problem. The children who were on the wrong end of the assault rifle in Florida, want less guns but the politicians want more. No insanity to see here….move along.
Wednesday was a good one for the UK economy; unemployment remained very low in spite of a small blip and average wages are starting to catch up with consumer inflation. The Pound gained heart from that but slipped in later trade after the governor of the Bank of England (BoE) gave a fence-sitting testimony to the Treasury Select Committee. He didn’t quite admit that ‘project fear’ ahead of the Brexit vote was a scam but did accept the UK economy is doing rather well and that wage prices would outstrip inflation this year. He threw in a few caveats though. He sees Brexit knocking 5% off wage growth but, given the BoE’s previous forecasting prowess, the markets will treat that with a degree of suspicion. Sterling also slipped ahead of today’s Q4 Gross Domestic Product (GDP) growth data. Anything below an annualised 1.5% will drop the Pound again but the opposite is also true.
The US central bank was also in the news later on Wednesday. In her last meeting in charge on Jan 30th
, Federal Chair, Janet Yellen made it pretty clear that interest rates in the US would rise this year and the markets have taken that on board. Equities fell and the USD strengthened on the release of the minutes. Other than a couple of speeches from Fed chair-people, there isn’t a lot of US news to ruffle feathers today.
The European Central Bank has a non-policy meeting today. It is being attended by the governors and presidents of the central banks from the member states; all except Latvia’s. They have sent the deputy governor because the governor is unable to leave the country whilst he faces bribery charges. Awkward.
Canada will release retail sales data later today. The annual growth rate is expected to remain around 0.2% but the short term data is looking a little weak. So don’t be surprised if the number misses the forecasts. That would inevitably weaken the Canadian Dollar.
By way of contrast, the New Zealand retail sales data, due for release overnight, is expected to be much stronger than in Q3. NZD strength should follow.
Going to be a busy day. Have a good one.