- New Zealand economy grows at fastest pace in two years
- China throws US a curve ball
By David Johnson
UK Prime Minster, Theresa May, has, it seems, learned how to talk tough. She has told the other members of the EU that she will not delay Brexit even if no trade deal is agreed. Is it churlish to suggest this should have been made much clearer much earlier? Maybe. Nonetheless, that was not the reason for Sterling’s strength yesterday; that was directly related to consumer inflation spiking back up to 2.7% when the markets had prepared themselves for a small scale drop.
This morning’s UK retail sales data has just been released, (I am running late as you might have guessed) and that was also much stronger than expected. 3.3% growth on the year is a shade less than last month but well above the forecasts of 2.3%. If Sterling traders had also been poised to sell the Pound, they were disappointed. Sterling is pushing towards $1.32 and is above €1.1250 at the interbank level, so these are heady heights for compared to the Pound’s recent performance.
New Zealand economy grows the fastest in two years
We heard overnight that the New Zealand economy grew at its fastest pace in two years in Q2 2018. At 2.8%, the Gross Domestic Product (GDP) growth rate was well above the forecast 2.5% and above the Q1 level of 2.6%. This appears to have been very broad based growth, with 15 of the 16 identified areas of the economy all posting gains. The New Zealand Dollar gained a cent against the Pound on the news, but gave some of that back when Sterling bounced on the retail sales data.
Euro focus more likely on Brexit than EU data
There is a smattering of EU data this morning but not enough to get pulses racing. Euro traders will be more closely focussed on the Brexit talks and the EU’s meeting to discuss migration problems. That is probably five years too late for many; hence the rise of right leaning parties across the EU.
This afternoon brings US housing data and the Philadelphia Federal Indices; all of which are interesting to the markets and the Federal Reserve. The US Dollar is a tad weaker today ahead of that data and in reaction to the rising tension between the US and China. Speaking of that, the Chinese have taken a very canny step in reducing import tariffs for most countries other than the US. The context is that China’s import restrictions have been prohibitive in the past and these changes will only make them a little less intolerable, but it is a like waving their bottoms at the US President. That isn’t something you would want to chance, physically.
A bum deal
And speaking of bottoms, The Associated Press is reporting that Michael Dwayne Johnson was arrested in Manassas, Virginia for indecent exposure after he was seen taking items off the shelves of his local supermarket, rubbing them on his exposed buttocks and the putting them back on the shelf. It gives a whole new meaning to gross-ery.