- Sterling levels off
- EU inflation picks up
- Canadian GDP awaited
If you want to run the Conservative Party and the country, you have until 12 noon to get your name in the hat. The job description is a simple one; coalesce the party, reunite the country, keep the Scottish independence issue off the agenda for the EU and UK parliaments, negotiate a great deal for the UK with Europe and the other countries of the world, stabilise the economy, level off the Pound, keep interest rates low, encourage investment in the UK, persuade companies not to relocate elsewhere and run everything else in the meantime. I can't understand why everyone isn't vying for the job.
To be fair, the markets have stabilised a little as traders and investors have realised the road to independence will take 30 months minimum and Britain isn't melting down after all. Sterling bounced a percentage point against most other currencies yesterday and stock markets did likewise. The UK Q1 GDP data was released in its final form this morning, just as the 2nd quarter draws to a close. The growth rate is 2% on the year. That would be envied by most countries right now and will help to keep the Pound on an even keel. We will get a speech later in the day from Governor of the BOE, Mark Carney. I wonder what the journalists will be asking about when the Q&A session starts.
The Euro gained a little ground after Eurozone inflation came in at an annualised 0.9%; a tad above the forecasts. We will also get the accounts from the last ECB monetary policy committee meeting today. These are a little more important now that the ECB may be called upon to support the Euro as the Brexit negotiations take shape. Whilst the UK doesn't trade in Euros, it does impact all of the Eurozone countries on an import/export basis, so the numbers will be important.
In addition to a few US data releases, this afternoon brings Canadian industrial production and GDP data; all of which is important for the Canadian Dollar. Clearly the UK side of things is more influential in the GBPCAD rate at the moment but Canada's growth rate has been a concern and the Canadian authorities will be hoping for something more than 0.0% on that release.
I read a report this morning that makes a mockery of the 'Old people have ruined our future' statements reported so widely in the press following the UK's decision to leave the EU. The headlines are generally accompanied by a picture of a glum twenty-something next to a job centre. I hadn't realised that, whilst 73% of the 18-24 year-olds who voted, opted for 'Remain', the fact is that only 36% of 18-24 year-olds actually went out and voted. So, if my maths are correct, only 26% of 18-24 year-olds actually voted for remain. It makes the indignation a little less palatable.
A cry for help in the night
A couple are fast asleep at 3am when they hear a loud banging at door. The wife pushes her husband out of bed to investigate and he stumbles down to the door in his dressing gown. When he opens the door, there is a guy asking for a push.
"Clear off," says the husband and shuts the door before heading back up to bed. When his wife asks who it was, he tells her and she is outraged. "What? A poor bloke needs help at this time of night and you can't even be bothered to assist. That's not a very community attitude is it. I am surprised by you!"
He rolls back out of bed, "Alright. I'll help him just so I can get some peace." He pulls on a pair of trousers and a T shirt and heads down stairs. He opens the door but can't see the chap. So he sort of whisper shouts into the darkness, trying not to wake the neighbours, "Hey. Sorry. I'll give you a push. I can't see you though. Where are you?"
"Over here on the swings", is the reply.
Today's Major Economic Releases
||UK: Current account
||UK: Final GDP q/q
||EU: CPI Flash estimate y/y
||EU: Core CPI Flash estimate y/y
||Canada: GDP m/m
||Canada: RMPI m/m
||US: Unemployment claims
FX Research by David Johnson
Daily Currency Analysis with Joe De Berniere
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