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February 2017

Article 50 trigger should pass into law today

Published: Tuesday 21 February 2017

  • ‚ÄčArticle 50 trigger should pass into law today
  • Greek debt continues to dog the Euro
  • US traders await Federal Open Market Committee (FOMC) Minutes and Consumer Confidence data
By David Johnson
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Some important strides were taken at the Eurogroup meeting yesterday, which pave the way for a package of reforms for Greece that will unlock further funding. Those reforms will encompass taxation, the pension systems and employment regulation, so they will be controversial and, of course, may not be acceptable to the rest of the Greek authorities or the Greek people, but this was always going to be a painful process.
 
That will take some time, but the day ahead brings a flurry of Eurozone Purchasing Managers’ Indices (PMI). These are likely to be a tad more upbeat than of late, so be prepared for some strength in the Euro in the hours ahead if that data meets expectations.
 
From the UK, we will get the Public Sector Borrowing data. Government borrowing is up and down like a flea on a kangaroo and each new set of data is met with reams of self-congratulation or excuses. This data will be no different. Sterling is likely to ride the wave with little directional impact. We should get the last of the speeches in the House of Lords before they let the Article 50 bill be passed. Prime Minister, Theresa May, watched the Lords from the gallery yesterday, almost defying them to challenge the public vote. I doubt they will.
 
This afternoon brings a US Consumer Confidence Index and that is expected to be a little less ebullient than last month. I doubt it will move the US Dollar very much, as traders prepare for Wednesday’s Federal Open Market Committee (FOMC) minutes. Any hint from them that interest rates will rise sooner rather than later and the USD will strengthen. Of that there is very little doubt.
 
I have often wondered why scientists believe no life can exist on other planets without water or at high temperatures. That is proven to be a myth when scientists in Mexico have discovered life forms in crystals whilst exploring a super-hot cave system called Hell. The Naica Mine in Chihuahua has yielded over 100 species, which have evolved undiscovered for over 60,000 years without light, without oxygen and ostensibly, without water in temperatures of 60 Degrees Centigrade. Life on other planets is out there, we just have no idea what it will be like.
 

Tests

 
“How can I help?” asks the optician.
“I’m having trouble seeing anything in the distance,” says the patient.
“Come with me,” says the optician.
He leads the chap out into the courtyard behind the shop.
“If you can put these sunglasses on please and look up for me,” says the optician.
The patient frowns at this unorthodox approach, but does as he is asked.
“Can you see that ball of yellow in the sky? What is that?” asks the optician.
“That’s the Sun,” says the patient.
“Well, that’s 93 million miles away. Just how far do you want to see?”
 
 

Today's Major Economic Releases
 

Market
BST
Data/Event
Previous
Expected
EUR All Day EU: Economic and Financial Analysis Affairs Council Meetings (ECOFIN)    
EUR 09:00 EU: Flash Manufacturing Purchasing Managers' Index 55.2 55.0
EUR 09:00 EU: Flash Services Purchasing Managers' Index 53.7 53.7
GBP 09:30 UK: Public Sector Net Borrowing 6.4b -14.4b
GBP 10:00 UK: Inflation Report Hearing    
USD 14:45 US: Flash Manufacturing Purchasing Managers' Index 55.0 54.7
USD 14:45 US: Flash Services Purchasing Managers' Index 55.6 55.8
AUD 21:30 Reserve Bank of Australia Governor Lowe Speaks    

For more information, infographics and the latest currency insights, visit www.halofinancial.com/blog
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