As Paris tries to get back to normality after a violent Friday and a disturbing weekend, so too do the people of Beirut. 40 people were murdered in this small city (population around 400,000) on Thursday and I don't think I saw it in the papers on Friday at all. It strikes me how sad it is that death and destruction in Middle Eastern countries has become so commonplace that it is barely mentioned in the western press but a proportionally similar atrocity in Paris (population some 2.2 million) covers every column inch of every newspaper and every news website for days. I mention this not to detract from the horror of the events in Paris or the grief of those affected but to wonder at the differing values that news editors attribute to life dependent on where that life is lived or indeed where it is cut short.
It seems callous to talk about the financial impact of such events but talk we must. The immediate impact in the financial markets has been a fall in share prices across Asia but the European markets are not yet open at the time of writing. We suspect this sell off will follow through into Europe and probably the UK and America later. The Euro is already being weakened by an expected ECB interest rate cut and perhaps further quantitative easing in December. But the principle fear amongst equities traders is that tourism to France which accounts for something like 7.5% of GDP, will suffer in the wake of these attacks and France is already in financial difficulties.
The Asian share market also reacted to news that the Japanese economy contracted by a much worse than forecast 0.8% in the year to Q3. That is the 2nd month of decline and therefore Japan is officially back in recession. This will inevitably cause further monetary stimulus in Japan and that will boost activity. Hence, the Yen strengthened against the Pound and the US Dollar. I suspect the realisation that these things take time will hit the markets quite quickly and we will see some profit taking on these moves.
This week brings a blizzard of inflation data although, ironically, almost none of it is going to cause any exchange rate drift. There is practically no material inflation in the global system but there is some exchange rate derived inflation. The historically weak South African Rand is causing problems for importers and we will see that played out in their inflation data on Wednesday. However, we don't think the South Africa Reserve Bank is likely to change it's 6.0% base rate on Thursday.
And other central banks will be in the news. The US Federal Reserve publishes the minutes to their last meeting on Wednesday but they are pretty transparent anyway, so we don't expect too many surprises. However, they are due to raise their base rate perhaps as soon as December, so there may be cause for volatility at least.
We'll get the mounted for the last Reserve Bank of Australia meeting tomorrow and they are on the cusp of an interest rate cut; or so the analysts believe. That publication will be pawed over for clues. The Australian Dollar remains weak ahead of that announcement.
And we will get a tipper load of data from the UK; inflation, retail sales, industrial input and output prices and an industrial activity survey from the CBI. It should be enough to keep Sterling traders on their toes but the Pound is up against a number of technical hurdles if it is to gain any further strength. This data will have to be strong to press sterling to new 2015 heights.
I will leave you with something a little more light hearted after an intense weekend. Joseph Griffin was taking a trip to Las Vegas and his son lent him a GoPro camera to film the trip for posterity. So that is just what joseph did. However, it wasn't until he returned home that he realised he had filmed everything in 'selfie' mode, so the viewer had no clues as to what he was actually trying to capture. 4 minutes of serious concentrating selfie movies is all they got. Technology is great isn't it!
Actual, church hall notices
Announcing a clothing sale, "The ladies of the church have cast-off clothing of every kind and they may be seen in the church basement on Friday"
A new Tithing Campaign is being launched with the slogan "I Upped My Pledge - Now Up Yours"
In another event announcement. "Weight watchers will meet at 7pm in the church. Please use the large double doors at the side entrance."
At the evening service tonight, the sermon topic will be 'What is Hell'. Come early and listen to our choir practice.
Wedding announcement. Irving Beltson and Jessie were married on October 24th in the church. So ends a friendship that began in their school days.