- Sterling up on house and growth data
- USD weaker after poor durable goods
- German data a worry for Euro
Sterling is a little stronger this morning following the improved Q2 economic growth data from the UK and in spite of Lloyds Banks decision to cull 3,000 staff members. It will also have been helped by the Nationwide house price index which showed average house prices in the UK at a record £205,715; that's 5.2% up on the year. There is no other scheduled data from the UK today but there is a potential for any kind of comment from any kind of individual, so we will stay on our toes. Late tonight we will get the Gfk consumer confidence index, so things may be very different by tomorrow morning. The forecast is pretty dire, as you might imagine but a lot of the dire forecasts for the UK have proven to be wrong in the last few weeks, so let’s not assume the economists who make these predictions know anything that we don't.
The Federal Reserve decided to leave the US base rate on hold when they met last night but there was a definite nod towards a rate hike in September or perhaps October and the markets took that on board but the US Dollar still slipped by three quarters of a cent on the news. That was also in spite of improved pending home sale data. Maybe President Obama's stirring endorsement of Hilary Clinton has depleted the potential for Donald Trump to take office. More likely the 4.0% fall in durable goods orders took its toll. That fall was driven by problems in overseas markets and that must be a concern for the Federal Reserve. Tomorrow's US GDP data will be crucial to the Fed's next move, so that could end the week with the USD strengthening as long as the data is an improvement on the 2.5% forecast.
Eurozone news started with German unemployment which showed an unchanged 6.1% unemployment rate in July but a record number of 2.66 million people unemployed. With the problems Germany is facing through Angela Merkel's open-door policy in migration and the overall slowdown, there is a strong chance the right wing will gain in the upcoming elections. This morning will also bring Eurozone industrial confidence index and that will undoubtedly have slipped. The index has been negative for quite some time but last month's slightly better result is likely to have been entirely unwound as the impact of the UK leaving the EU will have knocked confidence amongst German manufacturers.
We will get the New Zealand business confidence index overnight tonight and, with so much going on in New Zealand's overseas export markets, it would be strange if this didn't show a small downward correction. Last month's index reading of 20.2 was a huge increase on the previous 2 months so there is room for that correction and for the index to remain in positive territory.
And one of the things I love about seaside towns is the call of gulls in the air but the people of Conway in North Wales have had enough of the scavengers. They have formed the Conwy Residents’ Action Party (you can work out the acronym yourself) and have enlisted the help of a Harris Hawk to scare the gulls away. However, they do accept that it isn't the gull's fault. They are attracted by the people who feed them. So maybe they need to form another committee to get rid of the tourists. Clever acronyms would be welcome I am sure. Conway’s Local Enterprise Advocating Repelling Of Feathered Friends maybe.
A group of friends went out rambling one day but some wanted to follow the path up a hill and the others wanted to follow the valley road. So they decided to pair off in twos for the afternoon.
Late afternoon as the sun was going down, one of them returned alone, staggering under the weight of a heavy rucksack.
"Where's Fred?" the other ramblers ask.
Fred's walking partner, Brian, replied, "Fred must have had a heart attack. He just keeled over and died a couple of miles back up the path."
The other ramblers gasped and then one of them asked, "You left Fred lying out there but you carried the rucksack back?"
"I know it was a difficult decision," nodded Brian. "But I figured nobody would steal Fred."
Today's Major Economic Releases
||US: Unemployment claims
||US: Natural gas storage
||New Zealand: Building consents m/m
FX Research by David Johnson
Daily Currency Analysis with Zeta Webber
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