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November 2016

Sterling rises on Bank of England and Brexit ruling

Published: Friday 04 November 2016

  • Sterling rises on Bank of England and Brexit ruling
  • Euro may bounce on today’s data
  • US and Canadian employment reports rule the roost
  • US Presidential Election hangs over USD

Three things happened yesterday that gave the Pound a lift. Firstly, the British Government was told by the courts that they have to get Parliamentary approval before triggering the start of the EU departure negotiations. I wonder if MPs would dare to vote down something that was resolved by a referendum majority. The second thing was the Bank of England leaving the UK base interest rate on hold and taking a step back from the potential for further interest rate cuts as they raised their inflation forecast. Thirdly, the service sector Purchasing Managers’ Index (PMI) improved to a 10 month high. Traders loved it and the Pound sprang back to attention; gaining 3 cents against the USD and 1.5 cents against the Euro.
The lack of UK data today will leave the Pound vulnerable to other influences. Those include the EU services PMI and Producer Prices Index (PPI). These releases are not expected to be alarming in any way, so there is likely to be a pause during the morning trading session.
This afternoon brings Canadian employment data which is expected to be pretty benign after recent poor numbers. Like most other currencies, the Canadian Dollar weakened against the Pound yesterday but there is scope for a bounce back, so, if you are a CAD buyer, you may wish to act early.
Today’s US employment report might have less impact than normal. The US Presidential Elections due to take place on Tuesday should overshadow anything the Non-Farm Payrolls can through at the markets. Rarely has a US Presidential Election been so unreadable. Quite why anyone would vote for either candidate is a worthy debate, but vote they will and that will cause an opportune bout of volatility in the financial markets. If you have any requirement for any currency pair, you would do well to put an automated Limit Order in the market to try to capitalise on this capitalist election. A well placed order at the outer limits of the current narrow ranges is highly likely to be triggered and that is money in the bank if it is. Have a word with your Halo Currency Consultant before next Tuesday to see how that might work for you.
And the Metro newspaper has a scoop (or is it scop?). Either way, they believe they know how the word Scone should be pronounced. Apparently 60% of people say it in a way that rhymes with Gone but 40% think it should rhyme with Cone. That’s great, Metro. Thanks. Now is it Bath or Baaath?

What Brits say and what they mean.

1. “It’s not quite what I had in mind.” – Are you on drugs?
2. “That’s a bit off.” – I will never forgive you for what you just said. 
3. “Oh yes, he’s a lot of fun.” – He’s a raving lunatic.
4. “They’re fine once you get to know them.” – They’re obnoxious and you really won’t want to get to know them.
5. “It rings a bell.” – I have no idea what you’re talking about but keep talking and I will try to work it out.
6. “Anyway, it was lovely to meet you.” – I’m bored, please go away now. 
7. “I’ll let you get on.” – Seriously, naff off. 
8. “I might pop along.” – I’m probably not coming.
9. “I’ll see how I feel.” – I’m definitely not coming.
10. “I’ll have to check my diary.” – There is not a cat in hell’s chance I will be there.
11. “Did I give you enough cash?” – Give me my change this instant.
12. “With the greatest respect…” –You’re such an idiot.
13. “Sorry.” — I’m not sorry.
14. “I don’t mind.” – I do mind.
15. “It’s OK.” – It’s not OK.
16. “I’m fine.” – I’m furious.
17. “No really, I’m fine.” – My whole life is in tatters. I need alcohol.
18. “You should come over for dinner sometime.” – I will never invite you over for dinner.
19. “I’m sorry you feel that way.” – I have no interest in your petty bigotry.
20. “Could do, I suppose.” – That’s a rubbish idea and I will now explain why we are not going to do it.


Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR 09:00 EU: Final Service Purchasing Managers' Index (PMI) 53.5 53.5
EUR 10:00 EU: Producer Price Index (PMI) 0.0% -0.2%
CAD 12:30 Canada: Employment Change 67.2k -10.0k
CAD 12:30 Canada: Unemployment Rate 7.0% 7.0%
CAD 12:30 Canada: Trade Balance -1.9b -1.7b
USD 12:30 US: Average Hourly Earnings month-on-month 0.2% 0.3%
USD 12:30 US: Non-Farm Employment Change 156k 174k
USD 12:30 US: Unemployment Rate 5.0% 4.9%
USD 12:30 US: Trade Balance -40.7b -37.5b
USD 12:30 US: Unemployment Claims 258k 257k
CAD 14:00 Canada: Ivery Purchasing Managers' Index 58.4 56.2

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Daily Currency Analysis by David Johnson

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