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Sterling gently gains ahead of Gross Domestic Product and Brexit announcement

Published: Thursday 08 November 2018

  • Chinese trade surplus grows
  • Federal Reserve statement awaited across the pond
​​By David Johnson

Starting salaries at British companies are rising at their fastest pace in many years. It is a reflection of the uber-low unemployment rate and the shortage of good staff. By way of contrast, the Royal Institution of Chartered Surveyors (RICS) reported that their House Price Indicator has slumped to a six year low. Such, I guess, is the uncertainty we all face in the next five months. In spite of the mixed data, hints of an imminent Brexit deal announcement have kept the Pound in an upward trajectory against most other currencies, including the US Dollar, Euro and the Australasian and Canadian Dollars. Traders will also be eyeing tomorrow’s UK economic growth data, where the forecasts are positive.
Chinese trade surplus grows, but below forecasts

This morning started with a slightly lower than forecast Chinese trade surplus. Given recent mixed Chinese data that was perhaps to be expected, but the surplus still grew compared to last month. This comes as the US President is mooting whether a deal can be done with China on trade. He will, no doubt be looking for some positive news after losing control of one house in Congress.
Markets await US employment data and Federal Reserve Statement

US data includes the weekly Jobless Claims today. Approximately 214,000 fresh applications for welfare benefit are expected. Anything higher will be negative for the US Dollar and vice versa. Any movement there will be tempered by the Federal Reserve’s statement. This is an opportunity for the Fed’s Open Market Committee (FOMC) to share their views on the prospects for the US economy. Sometimes this is enlightening, but more often it is the same information as the last interest rate statement.
European Central Bank economic announcements underwhelming

We had the European Central Bank’s economic bulletin this morning. This was a pretty modest report and the statement citing “ongoing broad-based expansion of the Euro Area economy and gradually rising inflation pressures” kind of sums up the whole report. The Euro gave a ‘meh’ response.
Breaking news?

And Jim Acosta, a CNN reporter who often criticises the US President, has been banned from the White House and been called a ‘rude terrible person’ person by the President when he refused to have the microphone removed from him during a press conference. Acosta felt he had not received an answer to his questioning over the caravan of people heading for America’s southern border. I read once that if you aren’t ruffling feathers, then you aren’t a reporter.

In the psychiatrist’s office 

A psychiatrist said to his patient, “I am going to show you some ink blot patterns and I would like you to say the first thing that comes into your head.”
“OK”, said the nervous patient.
The shrink held up the first card and the patient said “naked woman.”
“OK”, said the shrink. “How about this one.”
“Two naked women,” said the patient.
“Uh huh,” said the shrink. “And this one?”
“Orgy,” said the patient.
“Well, I can see what’s going on here,” said the shrink. “You are obsessed with sex.”
“You can talk,” said the patient. “You’re the one with all the dirty pictures.”

Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR 09:00 European Central Bank Economic Bulletin    
EUR 10:00 EU: Economic Forecasts    
CAD 13:15 Canada: Housing Starts 189k 199k
CAD 13:30 Canada: National House Price Index 0.0% 0.1%
CAD 13:30 Canada: Unemployment Claims 214k 214k
USD 19:00 Federal Reserve Official Funds Rates 2.25% 2.25%
USD 19:00 Federal Reserve Official Statement    

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