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Sterling pushing higher on data and end game for Brexit

Published: Wednesday 27 February 2019

  • USD awaits North Korea deal
  • Aussie and Kiwi Dollars weaker on overnight data

The Australian Dollar is a little bit cheaper this morning after much worse than expected construction completions data. The markets had expected a rebound to 0.6% growth but the actual data showed minus 3.1% and that’s even worse than the contraction in quarter three. A widening of New Zealand’s trade deficit also weakened the Kiwi Dollar overnight. It would seem clear that the slowdown in China is hampering exports from Australasia but imported goods remain strong. This was the widest deficit since June 2006 and a worrying sign for the Reserve Bank of New Zealand, which may have to pursue an expansionist monetary policy at a time when it would have preferred to be raising interest rates.
Pound pushes a little higher

The number of UK mortgages being approved rose to the highest level since January 2017 and consumer credit also rose last month. That gave the Pound a boost and Sterling had another boost overnight as the British Retail Consortium saw shop prices rise 0.7%, more than expected. I should add the caveat (in spite of Brexit) because it is BBC-esque so to do. There isn’t a lot of data for the UK today but oh my word, there’s a lot of politics to contend with. It is likely Mrs May’s concession of a delay to Brexit will be the outcome but where is the room for an agreement between all the vested interests?  No really where is it? Sterling is riding high and has broken a number of resistance levels on the GBPEUR exchange rate and is pressing upwards at the top of its range against the USD. If a Brexit deal can be done, hang on for a stellar push higher.

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Canadian Dollar could get a boost

This afternoon brings Canadian inflation data which could well boost the Canadian Dollar, along with all the US data that is expected.
USD down on housing data – markets will be volatile today

Very poor US housing data knocked the US Dollar yesterday. GBPUSD gained a cent and EURUSD was up slightly less.

Later today, we will have a slew of US data, including housing data, factory orders and crude oil inventories. All are potentially market moving, so be aware of that. We may also see a deal done between the US and North Korea, as the US president visits the previously pariah state.
Have a fab day and don’t let the Brexit bugs bite!

Funeral cortege 

A man was leaving a cafe with his morning coffee, when he noticed a most unusual funeral procession approaching the nearby cemetery.
A long black hearse was followed by a second long black hearse about 50 feet behind the first.
Behind the second hearse was a solitary man walking a pit-bull on a leash. Behind him was a queue of 200 men walking in single file.
The man couldn't stand the curiosity. He respectfully approached the man walking the dog.
'I am so sorry for your loss, and I know now is a bad time to disturb you, but I've never seen a funeral like this with so many of you walking in single file. Whose funeral is it?'
The man replied, 'Well, the first hearse is for my ex-wife.'
'What happened to her?'
The man replied, 'My dog attacked and killed her while we were trying to settle our divorce in court after she cheated on me.'
He inquired further, 'Well, who is in the second hearse?'
The man answered, 'Her lawyer….and, as it turned out, her lover. He was trying to help my wife when the dog turned on him.'
A poignant and thoughtful moment of silence passes between the two men.
'Can I borrow the dog?'
'Join the queue.'

Today's Major Economic Releases

Market BST Data/Event Previous Expected
CAD 13:30 Canada: Consumer Price Index 1.9% 1.9%
CAD 13:30 Canada: Core Consumer Price Index -0.2% -0.2%
CAD 13:30 Canada: Common Consumer Price Index 1.9% 1.9%
USD 13:30 US: Goods Trade Balance -71.6b -74.1b
USD 15:00 US: Pending Home Sales -2.2% 0.7%
USD 15:00 US: Factory Orders -0.6% 1.5%

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