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September

Gross Domestic Product and Brexit boosts Pound

Published: Tuesday 11 September 2018

  • French employment stalls
  • Further positive UK employment data due
​​​​By David Johnson

Sterling had another positive day after a surprise uptick in economic growth and as further talk of a Brexit deal left the lips of EU negotiator, Michel Barnier. There were some caveats to his statement but a deal 'within 6-8 weeks' is all anyone really heard. The potential for Sterling to blast much higher is clearly evident in these upward steps every time a deal looks a tad closer.  So we start today with the Pound above €1.12 and $1.30. The Pound has also made gains against most other currencies ahead of this morning’s employment and average earnings data. A small gain in fresh jobs but no change in the unemployment rate are forecast but, at 4.0%, the UK must be near full employment.
 
The Euro started the day with no growth at all in French non-farm employment. The morning continues with what are predicted to be slightly downbeat indices from the ZEW German business surveys. It is interesting to see that the Euro doesn’t also strengthen on news of a Brexit deal but, I would argue that it ought to. German exporters would certainly benefit from continued unfettered access to the UK market.
 
After lunch, the data diary looks a little leaner. Canadian housing starts should be marginally better than last month and that may strengthen the Canadian Dollar but the US data is less likely to move the market.
 
As well we all know though, the US v China trade shenanigans and Brexit are the major market movers. So watch Twitter and the newswires and you will know as much about the market direction as anyone else.
 
And the fact that your wardrobe is overflowing with clothes but you haven’t got a thing to wear may not be your fault. You might just have the psychological disorder of ‘Hoarding’. The World Health Organisation says it is a real thing, so it must be true. So now you can feel OK about your wardrobe spilling over onto your chairdrobe and your floordrobe. It isn’t you, it’s a disorder. Phew, that’s a relief.
Time of his life
 
An old gents, clearly in his nineties, was sitting on a bench by a bus stop, crying his eyes out.

A policeman noticed this and asked him why he was crying.

"Well," says the old guy, "I just got married to a twenty-five year old redhead. She’s gorgeous and she’s a Cordon Bleu chef. Every morning she makes me a wonderful breakfast and then we make love. In the afternoon she makes me a wonderful lunch and then we make love. At dinner time she makes me a wonderful supper and then we make love. I ‘m no fool. I know she is really only after my money but, while this lasts I cannot believe how happy I am."

The policeman says, "Can I just say, happy men don’t sit at bus stops crying. What is the problem here?"

At that, the old guy starts sobbing again, "It’s just that I ..(sob)...have…(sob)… forgotten where I live!"

Today's Major Economic Releases

Market BST Data/Event Previous Forecast
GBP 09:30 UK: Average Earnings Index 2.4% 2.4%
GBP 09:30 UK: Claimant Count Change 6.2k 6.9k
GBP 09:30 UK: Unemployment Rate 4.0% 4.0%
EUR 10:00 EU: German ZEW Economic Sentiment -13.7 -13.5
EUR 10:00 EU: Employment Change 0.4% 0.4%
EUR 10:00 EU: ZEW Economic Sentiment -11.1 -10.9
CAD 13:15 Canada: Housing Starts 206k 213k
USD 15:00 US: Final Wholesale Inventories 0.7% 0.7%
USD 15:00 US: JOLTS Job Openings 6.66m 6.68m

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