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April 2017

US manufacturing slowing

Published: Wednesday 05 April 2017

  • US manufacturing slowing
  • British Retail Consortium (BRC) Shop Price Index slips
  • French Presidential debate brings forth slings and arrows
By David Johnson
The latest French Presidential debate delivered fireworks between front-runner Emmanuel Macron and his main rival, Marine Le Pen. Macron was scathing of Le Pen’s nationalist agenda, while Le Pen accused Macron of “speaking like old fossils.” It is generally considered that Macron performed better than Le Pen and remains ahead in the polls. The EU will be watching with keen interest as Le Pen is still staunchly anti-Euro and anti-EU. The Euro was unmoved by the events, but this morning’s EU Service Sector Purchasing Managers’ Index (PMI) has the capacity to shift the Euro.
The US Dollar was similarly unmoved by data showing a slowdown in the US manufacturing sector, to its slowest level of growth for six months. The data was still in positive territory, but the US economy is certainly not romping away at the moment. This afternoon’s Service Sector Index is expected to be stronger than March’s and that will boost the USD – if the forecasts are right – but the minutes from the Federal Reserve meeting being released later in the day will be more influential. When US interest rates will next rise, how many rises will come after it; and how much will the US base rate rise over the next year? This is all the markets really want to know. They won’t get all their answers today, but hints will be enough to shift the USD. Dollar buyers may wish to move ahead of that release.
Sterling should probably have fallen this morning after the BRC’s Shop Price Index fell by 0.8% after a 0.1% fall in February 2017, but the Service Sector PMI Index is likely to be a little more upbeat; and that will stabilise the Pound.
Other than these snippets, the day is a quiet one… a sunny one in London… and probably a thinly traded one ahead of the US data and Federal Reserve minutes.
Have a terrific Wednesday.

Blind flight crew

The passengers have all been seated on a commercial airliner when the pilot and co-pilot finally appear in the rear of the plane and begin walking up to the cockpit through the centre aisle. Both have dark glasses on; the pilot is using a white cane, bumping into passengers right and left as he stumbles down the aisle. The co-pilot is using a guide dog. At first, the passengers do not react, thinking that it must be some sort of practical joke. After a few minutes, though, the engines start revving, and the plane is shifted into the taxi area before starting to move down the runway. The passengers look at each other with some uneasiness. They start whispering among themselves and look desperately to the stewardesses for reassurance. The plane continues to accelerate and people begin panicking. Some passengers are praying and, as the plane gets closer and closer to the end of the runway, the voices are becoming more and more hysterical with screams and loud prayers being offered up to a number of different deities. When the plane has fewer than 50 yards of runway left, there is a noticeable change in the pitch of the shouts as everyone screams at once. At that very moment, the plane rotates on its axis, lifts off and is airborne. Up in the cockpit, the co-pilot breathes a sigh of relief and turns to the pilot: “You know, one of these days the passengers aren’t going to scream, and we won’t know when to lift the nose. “
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