With France having swerved the threat of an anti-EU party, Austria is next on the agenda for the right wingers. Vice Chancellor Reinhold Mitterlehner resigned on Wednesday; destabilising the coalition government and prompting calls for a general election, which may be a problem for the EU, because the anti-EU Freedom Party is currently leading in the polls. Frying pans and fires spring to mind as far as the EU is concerned and the UK’s Brexit negotiations aren’t even fully underway yet…oh and there is a contentious election in Germany in September. It must be noted that the Euro hasn’t collapsed on the news, but it has surrendered the gains it made around the time of the BoE statements yesterday.
The Bank of England downgraded their short term growth forecasts for the UK economy by a smidgeon but uplifted their longer term growth and medium term inflation forecasts. Sterling slipped on the news initially, but bounced back quite resiliently. Sterling is likely to tread water today in a UK data void, but the backwash from other events may have an impact. There are reports that President Macron of France has changed his conciliatory stance regarding the UK over Brexit and is now seeking to be tough. Frankly, what else would you say when going into such important negotiations? It’s hardly news is it.
The Eurozone story for today is the release of industrial production data, which is expected to be rather upbeat. The Euro, which has been weakening a little of late, may well recover as traders take profit on their short positions. It has already started well, with German Gross Domestic Product (GDP) data beating expectations at 0.6% growth in the first quarter of the year. That has reignited the debate over the magnitude of the advantage Germany has with an undervalued currency, though. If the Euro didn’t exist and the Deutsche Mark was still around, there is little doubt it would be significantly stronger than the Euro. That serves to rebalance things when an economy is doing very well. Without that counterbalance, Germany is at a major advantage over the UK, US and others. It’s the sort of thing that creates accusations of ‘currency manipulator’, but I couldn’t possible comment.
US data today includes retail inflation and retail sales volumes. Inflation is forecast to be around 2.3% and sales growth is expected to have risen by around half a percentage point in the month of April. If all is as expected, it will add weight to the calls for interest rate hikes from the Federal Reserve and will strengthen the USD to some extent.
Do you own a pair of Crocs? You are amongst friends here and it’s totally anonymous, so you can come clean. Either way, the blocky rubber sling-backs are a favourite amongst people who ‘only use them in the garden’ but I am guessing few would consider running in them unless being pursued by a man eating beast. Well, one family in Utah decided they were going to run a mini-marathon in Crocs. In fact, Benjamin Pachev wore Crocs and he came 16th in the Indianapolis 500 Festival Mini-Marathon. So ‘in your face, fashionistas!’.
True friends are like trampolines. I’ve never had one but they look like fun.
No one texts faster than an angry girlfriend.
Having a two year old child is like owning a blender… with no lid
If two wrongs don’t make a right, I’m thinking ‘third time lucky!’