Global slowdown in neon lights
The global slowdown was highlighted very clearly overnight. The consumer inflation rates slowed in China for January and Singapore for Q4. Add in another contraction in Korea exports, another fall in Japanese industrial production and a contraction in their capacity utilisation and the writing is not only on the wall but also lit with neon.
No surprise Euro has slipped against US Dollar
In the EU, Spanish consumer prices deflated at gathering pace in January. That 1.3% decline was largely in line with expectations, but three times as bad as December’s data. We will get the Eurozone
trade balance data this morning and, with Germany’s declining economic data
, we can expect poor results from that. It is no surprise the Euro has slipped against the US Dollar along with Sterling.
Also no surprise Sterling has slipped
Against this backdrop of slowing global performance and with the ever present hassles involving the ‘B’ word, it is no surprise the Pound hit another speed hump yesterday and slipped against all-comers. Sterling starts Friday in the UK below $1.28 and just above €1.13. It has also fallen a little against the Australian, New Zealand and Canadian Dollars amongst others.
The highlight – or maybe the lowlight – for today will be this morning’s UK retail sales data. The forecasts were for a slight improvement on December’s disappointing data, and the reported increase of 1% is welcome news for the Pound, although markets
are more preoccupied with the Government’s latest defeat on their revised Brexit plan
and whether the future is with a deal or no deal. The defeat was a knock back for the Prime Minister, but largely unsurprising; hence the Pound only trickled a little lower.
US Dollar could fall back a little
today takes the form of what is expected to be poor industrial production and, by way of contrast, consumer confidence that is forecast to be very positive. As always, if the forecasts are wrong and the data disappoints, the US Dollar may take a step back. That isn’t likely to be a big step, though, because the USD
is still sought after when global conditions deteriorate.
You may also find interesting:
And on this day in 1971, UK currency became decimalised. A shilling became 5p and ten bob notes were replaced by 50p pieces. We lost the farthing and gained 20p pieces (4 shillings in old money). And all the prices rose a little. I was quite young then, but I still remember my mum moaning about the cost of everything going up. Thank goodness we all understand money now and inflation is a thing of the past. Phew!