We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.


Sterling steady ahead of Gross Domestic Product data

Published: Thursday 22 February 2018

  • USD stronger on Federal bank’s bullishness
  • Mixed Canadian retail sales data expected
  • Upbeat New Zealand retail data expected overnight
‚ÄčBy 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 and 31st, 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.
I’m Fine
Farmer Brown decided his injuries from the accident were serious enough to take the haulage company responsible for the accident, to court. In court, the haulage company's fancy lawyer was questioning Farmer Brown. "Didn't you say, at the scene of the accident, 'I'm fine'?" asked the lawyer.

Farmer Brown responded, "Well I'll tell you what happened. I had just loaded my favourite mule Bessie into the..."

"I didn't ask for any details," the lawyer interrupted, "just answer the question. Did you not say, at the scene of the accident, 'I'm fine'?"

Farmer Brown said, "Well I had just gotten Bessie into the trailer and I was driving down the road..."

The lawyer interrupted again and said, "Your honour, I am trying to establish the fact that, at the scene of the accident, this man told the Highway Patrolman on the scene that he was just fine. Now several weeks after the accident he is trying to sue my client. I believe he is a fraud. Please tell him to simply answer the question."

By this time the Judge was fairly interested in Farmer Brown's answer and said to the lawyer, "I'd like to hear what he has to say about his favourite mule Bessie."

Brown thanked the Judge and proceeded, "Well as I was saying, I had just loaded Bessie, my favourite mule, into the trailer and was driving her down the highway when this huge semi-truck and trailer ran the stop sign and smacked my truck right in the side."

He continued, "I was thrown into one ditch and Bessie was thrown into the other. I was hurting real bad and didn't want to move. However, I could hear ole Bessie moaning and groaning. I knew she was in terrible shape just by her groans."

"Shortly after the accident a highway patrolman came on the scene. He could hear Bessie moaning and groaning so he went over to her. After he looked at her, he took out his gun and shot her between the eyes. Then the patrolman came across the road with his gun in his hand and looked at me."

Finally, Farmer Brown came to the end of the story. "The patrolman looked at me and said, 'Your mule was in such bad shape I had to shoot her. How are YOU feeling'?" 

Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR 09:00 EU: German Ifo Business Climate 117.6 117.1
GBP 09:30 UK: Second Estimate Gross Domestic Product 0.5% 0.5%
GBP 09:30 UK: Preliminary Business Investment 0.5% 0.5%
EUR 12:30 European Central Bank Monetary Policy Meeting Accounts    
CAD 13:30 Canada: Retail Sales 0.2% 0.0%
CAD 13:30 Canada: Core Retail Sales 1.6% 0.1%
USD 13:30 US: Unemployment Claims 230k 230k
NZD 21:45 New Zealand: Retail Sales 0.2% 1.4%
NZD 21:45 New Zealand: Core Retail Sales 0.5% 0.7%

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