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November 2017

Big change in Zimbabwe

Published: Wednesday 15 November 2017

  • Big change in Zimbabwe
  • Euro up on Gross Domestic Product data
  • Pound boosted slightly by UK wage data
By David Johnson
 

All change in Zimbabwe
 
So, it seems the day of reckoning has arrived for Robert Mugabe, as the army seizes control in Zimbabwe and former vice-president Mnangagwa returns to try to stabilise the country. The army claims to be targeting the criminals around the former president. It would be wonderful if Zimbabwe could recapture some of its former glory and the economy could recover. The Sterling – Zimbabwean Dollar rate is only a Dollar higher this morning, but there is a long day ahead.
 
Euro strengthens on disappointing UK data
 
Yesterday’s big mover was the Euro, which strengthened after Gross Domestic Product (GDP) data confirmed 0.6% growth in the three months to September; and that equates to 2.5% on the year. No doubt the Euro would have strengthened further if it were not for the 0.6% contraction in industrial production in the month to September. Other than French inflation numbers, there is no European data to speak of today. Hence, the Euro may well give up some of its gains.
 
Pound boosted slightly by UK wage data
 
UK average earnings growth data was released this morning. That, as you know, has been lagging behind inflation and therefore reducing disposable incomes. The Pound has strengthened a little on the figures, as, although the employment figure has dropped by 14,000 since last quarter – the first fall seen for just over a year and the biggest drop for almost two and a half years – wage growth has picked up somewhat, to 2% - and this has been well received by markets.
 
US consumer data expected but unlikely to help USD
 
This afternoon brings US retail and consumer inflation data. Inflation is expected to have slipped to around 2.0%, whilst the forecasts for retail sales are rather pants. No growth is most likely, but minimal growth of 0.1% is possible. Neither outcome would benefit the USD at a time when the Federal Reserve is seeking validation for its interest rate hiking plans.  
 
£25 million? Bargain!
 
And it isn’t often that a price tag of £25 million could be considered a bargain but, in the case of The Art of Grisogono; a 163.41 carat diamond, mounted on an emerald and diamond encrusted necklace, was expected to sell for £37 million or more. It is, after all, the largest diamond ever to be sold at auction.
 
Life saver

An entrepreneur was celebrating five years of business success aboard a yacht. He had invited all his friends and a number of people who helped him get started in business. He stood up on a box on the deck to make a speech just as the wake from another boat rocked the yacht and the businessman fell over the side, taking a waitress with him. They both hit the water with a splash. A banker is first to the deck rail and he sees that the businessman is treading water whilst the waitress appears to be floundering. He grabs a life preserver and shouts to the businessman, “Are you able to float?” to which the businessman replies, “Why are you talking to me about an IPO when the waitress is drowning?” 

Today's Major Economic Releases
 

Market BST Data/Event Previous Expected
GBP 09:30 UK: Average Earning Index 2.2% 2.1%
GBP 09:30 UK: Claimant Count Change 1.7k 2.0k
GBP 09:30 UK: Unemployment Rate 4.3% 4.3%
EUR 10:00 EU: Trade Balance 21.6b 21.2b
GBP 13:00 Bank of England Member Broadbent Speaks    
USD 13:30 US: Consumer Price Index  0.5% 0.1%
USD 13:30 US: Core Consumer Price Index 0.1% 0.2%
USD 13:30 US: Retail Sales 1.6% 0.0%
USD 13:30 US: Core Retail Sales 1.0% 0.2%
USD 13:30 US: Empire State Manufacturing Index 30.2 25.5
GBP 14:30 UK: Conference Board Leading Index -0.1% -0.1%
 

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