- Sterling up on more Brexit optimism
- Australian Dollar weaker as consumer confidence slumps
- Euro could weaken on industrial data
By David Johnson
The EU seems to be trying to rub salt into Theresa May’s wounds as it tells the UK it will have an OK deal, but seems set to offer a pan-African tariff free deal on trade. I understand that this is partly to tackle migrant problems and partly to assuage the Chinese appropriation of swathes of Africa, but the timing is curious.
Sterling hasn’t been affected by the announcement; it remains above €1.12 and $1.30, GBPCAD is testing CAD 1.70 to the Pound and GBPNZD is hovering below NZD 2.00 to the Pound. So Sterling is in remarkably rude heath considering the Brexit deal is not done, Jaguar Landrover’s boss is haranguing the Prime Minister to get a deal he likes and elements of Theresa May’s own party are openly plotting her downfall. Recent UK data has been supportive of the Pound. The lack of data today will allow room for profit taking, so be prepared for a slightly weaker GBP unless further positive Brexit news hits the newswires.
Australian Dollar weaker as consumer confidence drops
The Australian Dollar is a little weaker this morning after consumer confidence dropped in the latest Westpac survey. It is the worst reading since December 2016 and adds another statistic to the catalogue of reasons why the Reserve Bank of Australia (RBA) ought not to raise the base rate for some time to come.
Euro could weaken on industrial data
This morning brings Eurozone Industrial Production. The market forecasts are for a decline of 0.5%, but the recent poor data from some member states would suggest the data could be worse than that. That would weaken the Euro.
Star spangled data
The rest of today is largely wrapped in the stars and stripes. We expect US producer prices to have risen somewhat but another fall in crude oil inventories ought to support the USD because it is likely to predicate higher demand. However, the counterbalance is that stronger oil prices tend to weaken the currency in which oil is traded, i.e. the USD.
Something that has hardly been mentioned in the news is that the Ethiopia /Eritrea border has reopened after 20 years of tense relations between the two neighbours following a war. This is an immensely significant moment in East Africa’s history, but I wonder if Ethiopian Prime Minister Abiy Ahmed and Eritrean President Isaias Afwerki would be better represented in the news if they had lots of oil fields.
Pizza the puzzle
And the Russian Domino’s Pizza Company offered people 100 pizzas a year for 100 years if they got the Domino’s logo tattooed onto themselves. They evidently underestimated the local desire for free pizza. So inundated were they with images of tattoos that they had to promptly change the offering to the first 350 applicants. The result is that there are more than 350 people wandering around Russia with tattoos of a pizza company on their body; many of whom will probably, after eating at least two pizzas a week, become obese and may die young. I wonder what historians and anthropologists will make of that in 300 years.