- Sterling slips as Chequers plan looks rocky
- Manufacturing in focus for the US
By David Johnson
The Reserve Bank of Australia (RBA) kept its base rate at a record low for the 25th
consecutive meeting when they met early this morning (UK time). Their statement was a tad less negative than previously and the markets, keen to take some hint from the RBA, decided that was as good a reason as any to buy the Australian Dollar.
Stronger Sterling could be a long wait
Sterling is lower after further hoohah on whether the UK Prime Minister will get her Chequers Brexit plan anywhere near approval. No, seems to be the overriding feeling, so the markets decided to sell Sterling and sit on their hands until more clarity is available. Could be a long wait… The British Retail Consortium also announced a slowdown in sales overnight, but the number was still 0.2% growth and that has to be a small victory for the high street. However, the construction sector Purchasing Managers’ Index (PMI) was weaker than the previous month and well down on expectations. Sterling hasn’t collapsed, though. Perhaps traders are weary of selling the poor little Pound.
Italy situation spells trouble for EU
Italy’s mahoosive debt mountain has become a focus of attention as they battle with the EU over funding for migrants and the real risk of a localised recession in Italy. I am sure they are wondering ‘why them?’. They are seeking to break EU rules and expand their budget deficit when the EU is pressing them to tighten things up. Look out for headlines asking whether this is the beginning of the end for the EU.
Manufacturing dominates data in US
US traders return from a long weekend this afternoon with a strengthened US Dollar and just as many issues going on as there were on Friday. Their day will be dominated by manufacturing sector data and the forecasts are slightly lower than the previous month. The US Dollar is more likely to be driven by presidential Tweets than anything like hard data, though.
The people’s lottery?
And I love the fact that the National Lottery organisers think ticket sales are falling because we all want a pension style jackpot stretching out over 25 years rather than the immediate big lump sum. I am guessing everyone except them knows that making the odds much longer and pushing the cost up is the key. The lure of a big pay out is perhaps the only thing keeping ticket sales ticking over. I also wonder if, keeping the bulk of the funds for payment to the winner over 25 years might be good for cash flow, but seeking a commercial gain for the lottery people is probably a judgemental thought I should erase.