- Euro slips on mixed news
- New man at Reserve Bank of New Zealand to deliver monetary policy statement
By David Johnson
Tuesday wasn’t a big day for data, but there were some high points. The UK Halifax housing market data showed slower annualised growth in prices, but growth nonetheless. That hardly moved the Pound, but Sterling did edge higher during the day. Tomorrow’s Bank of England shenanigans are the big news of the week and no change is expected there, but the Pound continues to improve a little.
Euro weakness helps boost Pound
That is particularly true against the Euro. The Euro – US Dollar rate has fallen over the past few days and that weakness in the Euro against the emboldened USD has allowed the Pound room to improve. The GBPEUR rate is above 1.14 again and may well edge higher still as the day progresses.
Not much news expected from US today
I doubt Trump’s decision to ignore the pleading of French President Macron to stick with the Iran deal had much to do with things, but the US Dollar did react positively to the announcement. US markets seem to like a bit of gung-ho. Today’s US Producer Prices will be largely overshadowed by that story and, other than a speech from a Federal Reserve member, there isn’t a lot to focus on in the US of A today.
Patchy European economic improvement
European data is improving, of that there is little doubt, but it remains rather disparate. German Industrial Production bounced back a little last month, but French Industrial Production data (due this morning) is forecast to have gone the other way and we are expecting a slowdown in Italian Retail Sales data, also due this morning. The coalition talks in Italy appear to be failing, so yet another election seems imminent. All is not certain in the currency sharing bloc and it also appears to be dawning on the markets that the EU’s second largest contributor is actually leaving. Further weakness in the Euro is a real possibility.
New Zealand interest rate decision from new central bank chief anticipated eagerly
After the UK and US have shut down for the day, we will get an interest rate decision from the Reserve Bank of New Zealand. No change is expected but the Reserve Bank of New Zealand (RBNZ) has a few dilemmas on its hands and a new man at the helm. Governor Adrian Orr will deliver his first monetary policy statement tonight and the markets are keen to evaluate the new man’s mind-set. The RBNZ is tasked with managing inflation and maximising employment these days. However, it is likely Mr Orr will say no change now and perhaps none for a year when he speaks. The New Zealand Dollar will only react if he changes that script.
And FIFA is trying to choose a slogan for England’s team bus for the 2018 World Cup. “Send us victorious”; “Drive forward as one”; and “Pride. Passion. Together” are three suggested options, but fans and non-fans have their own ideas. ‘Keep the engine running’, is one suggestion and ‘Bussed in – bust out’, is another. What are your suggestions? I quite like ‘Overpaid, underwhelming and over here,’ or the grammatically dire lie of, “We was robbed.”