- UK inflation remains marginally negative
- US inflation meets forecast
- Fed meeting minutes may hint of rate hike date
The show of solidarity with France was very moving at Wembley Stadium last night. Having English football fans sing La Marseillaise and the beginning and applauding an impromptu rendition at the end of the game was heart-warming and the French Prime Minister's words summed it up rather well. Manuel Valls tweeted a message that translated as, "The Marseillaise at Wembley. Two peoples in unison. Immense emotion. Liberty. Equality. Brotherhood."
The financial markets were nowhere near as emotional yesterday. In fact, there wasn't a lot to get too emotional about. The UK inflation data was exactly as expected; a 01% decline on the year in the cost of living relates to the competition on the high street in part but the greater impact comes from depressed energy prices. Perhaps OPEC will give up on their defiant economic pressure on the US and start slowing supply at some stage. At that point inflation will start to pick up. If that doesn't happen within 6 months, we will still see a rise in inflation because it is calculated year on year and these energy price falls will start to work their way out of the data. So whilst the Bank of England has no pressure to raise UK base rates right now, they are likely to start to see that pressure by the middle of 2016. Sterling remains relatively strong in anticipation of that and in response to data which makes data from the EU and elsewhere pale into insignificance.
The US inflation data was largely as expected so the Sterling – US Dollar exchange rate is largely unmoved. In fact the GBP-USD chart is an image of uncertainty. That is perhaps not surprising when the Federal Reserve is hinting a rate hike will happen next month but many are not completely convinced. We get the minutes from the last Federal Reserve Open Market Committee meeting this evening. Maybe there is enough in there to clarify things. There is certainly room for volatility in the US Dollar later in the day. This is an excellent day for automated orders to do their thing.
The Australian Dollar was lacklustre overnight after data showed wages growth at a low ebb; the slowest growth since 1998 in fact. Pressure is increasing for the Reserve Bank of Australia to cut the Aussie base rate and give the economy a chance to fill its lungs.
And every once in a while, someone comes along and changes things for ever. Mohammed Ali did it for boxing, George Best did it for football, Tiger Woods did it for golf and Jonah Lomu did it for Rugby Union. His impact was immense and so was he. His physical size combined with strength and outrageous speed changed the way rugby players and coaches thought about the game and about what was possible. It is so sad to see his passing at the appallingly young age of 40. He will be missed, just as he was by so many tacklers in his career.
Two brothers farm for a living. One is heading off to the other side of the country to view a bull that they plan to buy for their herd. "Send me a message when you have seen him and I'll bring the trailer down to collect him if he is all OK", says Bert.
"OK," says Fred and off he goes to catch the train.
He arrives at a station in a town of just a few houses and one post office. He checks his phone and there is no signal whatsoever. Nevertheless, he sees a tractor nearby and it turns out to be the farmer he is meeting. They trundle for half an hour along tracks until they reach the farm and Fred finally gets to see the bull. He is magnificent and Fred agrees to buy him for £999 and that uses up almost all of Fred's money. The farmer doesn't own a phone because the phone company won't run a line so far out of town and there is still no mobile signal, so Fred gets the farmer to take him back to town and he calls into the post office to see if they can send a telegram for him.
The postmaster says they do send telegrams and it costs a pound a word. "I've only got a £1 coin on me. Is there a cashpoint anywhere?"
"Nope", says the Postmaster.
Fred thinks for a while and then says, "OK. Please send this message 'Comfortable'
"I can send it", says the postmaster, "but how is Bert going to know that this means you've bought a bull and he has to collect it?"
"He's a slow reader", says Fred. "He'll break down the syllables."