- NZ trade surplus beats forecasts
- Sterling back to USD1.46 and EUR1.30+
- German consumer confidence at 9 month high
- Canadian interest rate decision ahead
Sterling had a stellar day yesterday as traders started to believe the EU exit vote would go in favour of the 'Remain' camp. Fears over the EU disagreements between Germany and the ECB and over the Eurogroup agreement on debt relief for Greece are overshadowing the Euro itself. There are so many 'Brexit' polls being published that it is hard to see what the outcome of the actual vote will be and pollsters a track record for getting it dramatically wrong. However, the Institute for Fiscal Studies has released a stark warning about two years of British austerity if the UK leaves the EU. They also attempt to debunk the £350 million a week that, it is said the UK would no longer need to send to the EU after exit, saying Britain may ONLY save £87.5 million a week if it leaves the EU. And they say that like it is a bad thing.
Oil prices bounced to $50 a barrel yesterday on hints that the US production levels are down and that has buoyed Asian share markets but weakened the US Dollar. Any hint that the Federal Reserve will deliver on the rumoured June rate hike would reverse that weakness in an instant, so be wary if you are a US Dollar buyer.
We had news over night from Australasia; Australian construction activity declined by 2.6% in the first quarter of the year; adding to previous falls in activity. And New Zealand reported a NZ$292 million trade surplus. That was much better than expected and it strengthened the NZ Dollar by 3.5 cents against the Pound in early trade.
The day ahead brings the German business confidence IFO report and a number of EU speakers. Watch out for volatility there. We will also get a Bank of Canada interest rate decision at 3pm UK time and, whilst we cannot expect any change in the base rate, we will be keen to see any accompanying statement and the mood of the BOC in these tough times for commodity markets and exporters.
And it must be better weather because the newspapers are full of pictures of sharks near the coast in Cornwall. The pictures generally look dramatic but are always shown to be basking sharks which are entirely harmless to humans. I wonder if it is the same set of pictures they trawl out every year because the text in the articles is always the same. Either way, if something 20 foot long cruised past my Lilo, I think I would get out of the water before checking which species it was.
A wealthy recluse died and his long suffering house keeper and maid was disappointed to see that he had left all his money to a local charity and made no provision for her at all in spite of 20 years of loyal service. He had though provided £50,000 for his funeral arrangements and the housekeeper was instructed to make the arrangements.
When a few local people and some of his past acquaintances turned up for the funeral, they were all aware of the huge sum set aside for the funeral and were surprised to see quite a low key funeral take place.
One of his business associates, who knew how tight-fisted the old guy had been, said to the housekeeper, "So go on then; how much did this really cost?"
"Three thousand," she said "but I made a £1,000 donation to the church spire fund and I spent the rest on a lovely memorial stone."
"Crikey," said the guy, "how big is this forty six grand memorial stone?"
The housekeeper showed him her hand, "three and a half carats."
Today's Major Economic Releases
||EU: German IFO business climate
||US: Goods trade balance
||US: Flash service PMI
||BoC rate statement
||Canada: Overnight rate
Daily Currency Insight by David Johnson
Daily Currency Analysis with Charlie Horsley
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