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Sterling steady amid rumour and denial

Published: Friday 18 May 2018

  • Eurozone trade balance awaited
  • Canadian retail sales rebound likely
​​By David Johnson

Sterling had a bumpy day after a report (later denied) that the UK could stay in a customs union with the EU beyond 2021. I am surprised anyone managed to find the story in amongst the Meghan Markle family saga, but they did.
Eurozone confusion could weaken Euro
Eurozone construction output data was a bit of a mishmash; the previous months’ data was downgraded, but the headline was higher. Work that out if you can. Traders were clearly bemused by the numbers, because the Euro was more static than a Cleethorpes caravan.  The only interesting data from Europe today is the trade balance. The forecasts vary but favour a narrower trade surplus. That would be in line with other EU data. If so, the Euro will slip.
US Dollar unmoved by surprise manufacturing results
The surprising US data yesterday was a sharply stronger Federal Reserve Bank of Philadelphia Manufacturing Sentiment Index, which was 50% stronger than forecast. Aside from that news, which failed to move the US Dollar, President Trump is playing the pre-negotiation game by saying he thinks trade talks with China will be unsuccessful. His negotiator is saying the North American Free Trade Agreement (NAFTA) talks are also struggling. I thought Trump said he was a deal maker.
Canadian data could prove interesting
Friday’s data diary lacks pizazz. (I’ll wait while you check if it’s a word). See!  Anyway, other than Canada, the rest of the world has very little data to offer. The Canadian data is interesting though; inflation is expected to be roughly in line with last month’s 1.4% (annual rate) but retail sales are forecast to have risen by half a percentage point after last month’s flat reading. The Canadian Dollar is already benefitting from a rise in raw material prices, so this could give it a little more momentum.
And we’ve all had that moment; the one where you are out and you’ve forgotten something important. Popping home to get it is sometimes an option. Not so for astronauts on the International Space station, one of whom left his camera’s memory card at home and only realised as he was preparing for a spacewalk… which was supposed to be live streamed as well. The debate over whether a GoPro will work without the card is quite sweet.  
I’ll let you get off now because you’ve probably got to secure your place on the streets of Windsor and get your camp bed laid out. Have a great weekend.
Interview technique

Interviewer – It says in your CV that you are very fast at mental arithmetic.. What’s 45 times 32?
Interviewee – 857
Interviewer – That’s not even close!
Interviewee – Maybe, but it was fast

Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR 09:00 EU: Current Account 35.1b 35.1b
EUR 10:00 EU: Trade Balance 21.0b 20.7b
CAD 13:30 Canada: Consumer Price Index 0.3% 0.3%
CAD 13:30 Canada: Core Consumer Price Index 0.2% 0.2%
CAD 13:30 Canada: Retail Sales 0.4% 0.3%
CAD 13:30 Canada: Core Retail Sales 0.0% 0.5%

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