- Early Eurozone data disappoints
- Federal Reserve minutes are the event of the afternoon
- New Zealand Dollar likely to weaken overnight
By David Johnson
The Italian President is throwing his weight about, rejecting candidates for Prime Minister and Finance Minister. So there is still no government in Italy. And in French unemployment data showing a sharp spike from 8.9% to 9.2% and this morning’s very poor French, Italian and Eurozone service sector Purchasing Managers’ Indices (PMI) and the Euro ought to be under pressure, and it is. The shared currency is down to USD 1.17 and allowing the Pound to push back above €1.14.
Scope for Sterling to recover
That is an oddity, because Sterling is also weak. The Pound is below $1.34 and has lost significant ground against the likes of the Australasian and Canadian Dollars as well as the Swiss Franc and others. UK inflation data released today was expected to stay around 2.5% on the Consumer Price Index (CPI) measure. Importantly, that is below wage growth and that is a significant fact. However, the Pound has fallen on the disappointing actual CPI figures, posting the lowest inflation for over a year.
US Dollar could strengthen further
Aside from service sector and manufacturing PMIs and housing market data from the US, we will also get the minutes from the last Federal Reserve Open Market Committee meeting today. When and how fast the Fed is planning to tighten the money supply is really the only thing anyone wants to deduce from this meeting’s chitter chatter. So traders, analysts and commentators will ditch anything that doesn’t address those issues and focus right in. The US Dollar, which is already unreasonably strong will strengthen some more if the date of the next rate hike is drawing closer and will weaken if the Fed has gone all ‘procrastinator’ on us.
New Zealand Dollar likely to weaken overnight
Overnight tonight, we will see New Zealand’s trade balance. This data has been very volatile of late and another sizable deficit is forecast. So a weaker NZD is likely before the UK opens its doors tomorrow.
And on this day in 1922, at the age of 21, a chap called Walt Disney incorporated his first film company. It was called Laugh-O-Gram Films. Whatever happened to him?