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Sterling boosted by tunnel light approaching

Published: Friday 02 November 2018

  • Aussie Dollar stronger on US-China deal hints
  • Swiss Franc hit by poor retail sales
  • US and Canada employment data awaited
​​By David Johnson

Sterling has a super, smashing day
Sterling had a super smashing marvellous day on Thursday. Buoyed up by rumours of a passporting deal and of an early agreement on Brexit, the much maligned Pound scooted up a rung or two against almost all currencies. It tested $1.30 and €1.14 before the end of the day but stalled as these are the tops of its recent ranges. 
I could run you through all the rumours and counterpoints, but it is Friday and no one wants to hear all of that flannel on TGIF day. Suffice to say, we were told a Brexit deal would be done by 21st November and then we were told that was gibberish. Nuf said. The Bank of England (BoE) did what we all expected and left the base rate on hold, but many focussed on the positives from a press conference at which the Governor stated the blooming obvious, i.e. that a smooth Brexit would be good for the UK economy and may predicate a faster pace of interest rate hikes. Duh! And, do you know what, the opposite may also be true. It isn’t exactly the work of Mystic Meg, is it? 
Australian Dollar gets a lift
We got Australian retail sales data overnight, which were a tad below expectations, but the Producer Price Index showed a very healthy rise and, as that could feed into consumer inflation, is another nudge for the Aussie central bank to consider interest rate hikes. The Australian Dollar gained a little on that news and also on news that the US may be preparing a draft trade agreement to present to the Chinese. China and the US are important export markets for Australia.
Steel yourselves for surprise Euro weakness
This morning will bring a slew of European Purchasing Managers Indices (PMI), which are largely expected to be in line with last month. There is a feeling, though, that these forecasts may be a tad optimistic, so be prepared for unexpected weakness in the Euro. Mind you, I doubt the EU itself will be too worried; they have a defiant Italy and a Brexit deal to consider, plus the looming loss of Angela Merkel at the top table. All is not good at the House of Brussels.
Swiss Franc in trouble
The Swiss Franc is under some pressure after retail sales in the country dived in October. The markets were expecting a miniscule 0.2% contraction, but the actual number was 2.7%. Not good.
All-important employment data for USA today
Moving on, today brings the all-important US employment report. Further job creations are expected; somewhere in the 180,000 to 200,000 range and the unemployment rate is likely to stay at the mightily impressive 3.7%.
Canadian Dollar could get boost from employment data
Canada also publishes employment data this afternoon. That, too, is expected to be rather upbeat, so Canadian Dollar strength in later trade is a real possibility.
The wonders of technology
And I can’t be the only one who thinks using the internet has become a total chore. You have to agree to cookies policies and then an advert pops up and you have to wait until you can skip it. Then you scroll down and some damned video starts playing in the corner of the screen, which, when you click it to switch it off, expands into an advert which you have to skip or close and then you realise it isn’t the site you wanted anyway and have to go through the whole palaver again on the correct site, but they want you to confirm your ID before you can carry on and that requires two factor authentication and then there’s some music playing, but you can’t find out where it is on your screen to shut the flipping noise up. Please excuse the bad language but… well… just… grrrrrrrr!

Some great one liners

“I used to be addicted to swimming, but I’m very proud to say I’ve been dry for six years.” Alfie Moore

“I usually meet my girlfriend at 12:59 because I like that one-to-one time.” Tom Ward

“I was raised as an only child, which really annoyed my sister.” Will Marsh

“You can’t lose a homing pigeon. If your homing pigeon doesn’t come back, then what you’ve lost is a pigeon.” Sara Pascoe

“I wanted to do a show about feminism, but my husband said no.” Anon

“As a kid I was made to walk the plank. We couldn’t afford a dog.” Gary Delaney

“I was watching the London Marathon and saw one runner dressed as a chicken and another runner dressed as an egg. I thought: ‘This could be interesting.” Paddy Lennox

“Jokes about white sugar are rare. Jokes about brown sugar, Demerara.” Olaf Falafel

Today's Major Economic Releases

Market BST Data/Event Previous Expected
GBP 09:30 UK: Construction Purchasing Managers' Index 52.1 52.0
CAD 12:30 Canada: Employment Change 63.3k 12.7k
CAD 12:30 Canada: Unemployment Rate 5.9% 5.9%
CAD 12:30 Canada: Trade Balance 0.5b 0.2b
USD 12:30 US: Average Hourly Earnings 0.3% 0.2%
USD 12:30 US: Non-Farm Employment Change 132k 194k
USD 12:30 US: Unemployment Rate 3.7% 3.7%
USD 12:30 US: Trade Balance -53.2b -53.5b

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