- Sterling flat after wage growth concerns
- Reserve Bank of New Zealand (RBNZ) likely on hold but remit may be changing
By David Johnson
Sterling continues to remain flat
A survey by the Recruitment and Employment Confederation shows UK wages starting to rise amidst a reduction in EU workers available for employment. If this is right, then the Bank of England (BoE) may be proven to be insightful in their interest rate hike but may have to revise their cautious forecasts for wage growth and maybe for further interest rate hikes. Sterling hasn’t risen on the news, so maybe traders think the report is not so influential.
Trump lands in China for talks
In a remarkably well timed release, China’s trade surplus against the US has narrowed on the day the US President arrives for a state visit. US companies are angry at what are seen as restrictive trade practices by China and a complete disregard for copyright laws. So this unexpected development may ease pressures during the talks between the US and Chinese Presidents. Not by much I would guess.
Markets await Reserve Bank of New Zealand rate decision
The Reserve Bank of New Zealand (RBNZ) meets later tonight, to set the NZ base interest rate. No change is expected from them at this meeting, but the New NZ Finance Minister has spoken of a change in the RBNZ’s remit. If they are tasked with achieving full employment as well as inflation targets, we may well see lower interest rates and for longer. It will be interesting to see whether they comment on that in their statement later on.
The rest of Wednesday is a gaping chasm where there should be data. Canadian housing starts and building permits data is about as enthralling as it gets but Thursday is awash with reasons to be volatile. Roll on Thursday then.
Until then, take a moment to remember that one year ago today, Donald Trump was elected as the 45th president of the US of A. It’s hard to believe isn’t it. We’ve hardly heard from the guy in that year. It’s like he doesn’t even exist.