- Sterling rallies after Bank of England Member Haldane's remarks
- Reserve Bank of New Zealand holds rates at 1.75%
By Charlie Horsley
Yesterday, the Conservative Party Queen’s Speech rolled back most of the contentious issues that had been contained in the election manifesto. There was no mention of the “Dementia Tax”, means-tested winter fuel allowance, or abandoning the triple lock on pensions. This may appease the party for now, but it would seem that UK Prime Minister May’s position is becoming more vulnerable by the day. The currency markets took their cue from strong remarks from Monetary Policy Committee (MPC) member Andrew Haldane, who now believes that there may be a case to raise interest rates in the UK this year. He believes that rising inflation needs to be carefully monitored and that interest rates may have to rise as soon as the second half of this year. With three members voting for a hike at the last meeting, the odds of movement have now increased significantly and the Pound duly rallied.
While there was some volatility, the foreign exchange markets are generally staying within last week's ranges, as most pairs engage in consolidative trading. The New Zealand Dollar firms up slightly today as markets view the Reserve Bank of New Zealand’s (RBNZ) statement as a mildly aggressive turn. The New Zealand Dollar strengthens broadly after the RBNZ left the Official Cash Rate (OCR) unchanged at record low of 1.75%, as was widely expected.
EU leaders will start a two-day meeting in Brussels today. This will be French President Emmanuel Macron's debut in the European Council (EC) Summit. But the bigger focus will be on UK Prime Minister May, who is having her first EC Summit since the disastrous election. May is expected to brief the other 27 leaders on the principles of citizens' rights regarding Brexit. This topic, along with the financial settlement and Ireland, are the top priorities in Brexit negotiations.
Data wise - Switzerland will release Trade Balance data in European session, while UK will release the Confederation of British Industry (CBI) Trends Total Orders.
And if you thought recent US and UK elections were contentious enough, you’ll be surprised/relieved maybe to hear that political corruption comes in all shapes and sizes. At Vista Murrieta High school in Southern California, parents and students were concerned about the outcome of elections for Class President and a couple of other posts. When they investigated, they found very suspicious voting patterns on their online system. The hacker or hackers had gone through the voters lists alphabetically and entered votes for them. As far as I can tell, there was no Russian involvement though.
Summer Solstice? You mean when it gets darker…?
Thanks for making the longest day of the year longer by explaining why it’s the longest day of the year!
How to Get to the Midsummer Festival?
A townie was looking for the Midsummer festival, he stopped and asked a local, “Will this road take me to the Midsummer Day festival?'
'Oh no,' said the local man. 'You'll have to go by yourself!'
On Midsummer's Day, two yokels were on the train heading homewards through Somerset, when one of them noticed some cows.
'What a lovely bunch of cows.' he remarked.
'Not a bunch, herd,' his mate replied.
'Heard of what?'
'Herd of cows.'
'Of course I've heard of cows.'
'No, a cow herd.'
'What do I care what a cow herd? I have no secrets to keep from a cow.'