- Sterling still strengthening ahead of potential rate hike
- US Federal Reserve to clarify rate hike plans
By David Johnson
It is such a tragedy to hear that another lunatic has been indiscriminately killing people in New York. If the moron thought he was targeting Americans, he failed. Five of the murderer’s eight victims were friends who had travelled from Argentina. Our hearts go out to everyone affected by such insanity.
In the financial markets, Sterling continues to strengthen ahead of tomorrow’s Bank of England meeting and after the Nationwide report showed UK house prices picked up in October. An annualised 2.5% was up from September’s 2.3%. The threat of higher mortgage costs may have galvanised activity, boosting demand, but there is still a mismatch between available listings and buyers in some areas of the country. We will get manufacturing sentiment this morning in the form of the Purchasing Managers Index (PMI) and a speech from a Bank of England (BoE) member at 10am (GMT). So, the Pound has scope for more volatility ahead of the rate decision on Thursday.
There isn’t a great deal of European data today, but Senor Puigdemont, the Catalan leader, is heading back to Barcelona. The chances are he will be arrested and that may reignite the pro and anti independence movements.
US news this afternoon includes manufacturing sentiment indices from the PMI and ISM surveys. Overall, that data is forecast to be a little on the gloomy side, so the USD could have a poor afternoon. Its overnight fate rests with the US Federal Reserve. They will announce whether they are changing the US base rate at 18.00 GMT. No change is expected but their statement should point to monetary tightening in the months ahead. The pace and commitment behind that statement will be the driver of the USD, now that diplomacy seems to have broken out in the rhetoric war with North Korea. It’s interesting how the two sides in that dispute are run by men with such interesting taste in hair styles, don’t you think?
And it is sad to hear that the Nippy Bus company in Somerset has ceased to trade, but the nature of the shutdown does make you wonder what led to that moment. The MD, Sydney Hardy, sent a message out to the staff on Sunday night, suggesting they should have a lie in and confirming that the company would no longer operate because he was quitting because, ‘I cannot work with you, the people I employ, for a moment longer.’ There is a much larger story in there somewhere.