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October 2016

ECB minutes awaited

Published: Monday 03 October 2016

  • Sterling slides as PM says Brexit negotiations set to start by March
  • UK service sector shrugged off Brexit fears
  • ECB minutes awaited
  • US employment report - will it disappoint again?
That was a disappointing weekend for British sports fans. The Ryder cup has gone West and Lewis Hamilton’s car went up in flames. They’ll all bounce back though.
It was an interesting end to last week for the markets and, in particular, for the Pound. The UK service sector, according to the Office for National Statistics, grew by 0.4% in July and that was up on the May-June growth rate. Given the doom-laden forecasts of a Brexit vote before the event, this is a real turn up for the books. Whilst activity was up, this week’s service sector PMI will be very closely watched for corroborating evidence.
Nonetheless, the announcement over the weekend from the Prime Minister that she will fire the Article 50 starting gun before March has dampened enthusiasm for the Pound. Sterling is a cent lower against the USD and Euro and down similar amounts against other currencies. There is a dearth of UK data today but I am sure the EU exit comments will keep things lively.
This week’s other big events include the interest rate decision from the Reserve Bank of Australia. No change  is expected to their 1.5% base rate but the tone of the way that message is delivered will drive the AUD through the week.
We will also get Purchasing Managers Indices from a number of countries as well as the Eurozone. The European Central Bank publishes the minutes from their last meeting this week. Clues will be sought to any extra measures they may implement to try to inject some life into the Eurozone economy but the President, Mario Draghi has already said that governments need to do more because the ECB can’t reinvigorate the EU on its own.
And the week will be capped off by the US employment report. There are some very positive forecasts for the growth of non-farm labour but they were positive last month and the 151,000 fresh jobs figure disappointed everyone. So don’t be surprised if the number is very different to the forecasters’ opinions. Equally, don’t be surprised if the USD ignores the data and carries on strengthening as further safe-haven demand boosts its value.
And scientists in America have discovered the intuition gene; proving that 6th sense does exist.  They used a slightly more interesting word to describe it. They say this 'Piezo2' gene deals with 'proprioception'. But surely everyone knows that 6th sense is a real thing. Anyone who has tried to hide something from their mother that is.
A man is woken in the night by his son, Charlie having a nightmare. The man wakes him and asks if he is OK? Charlie says he is scared because he dreamt Auntie Rita had died. The father assures Charlie that Auntie Rita is fine and tucks him in, telling him to go back to sleep and not to worry. 

The next day, Auntie Rita dies.

One week later, Charlie is having another nightmare. This time, when the man wakes him, Charlie says he had dreamt that Uncle Pat had died. The father assures the son that Uncle Pat is fine and his dream about Auntie Rita was a coincidence and tucks him in.

The next day, Uncle Pat dies.

A few weeks later, the man is woken again by his son shouting out in his sleep. So the man wakes him. This time Charlie says he had dreamt that daddy had died. The father assures the son that he is absolutely fine and in good health and gets the boy back into bed.

The man goes to back to his bed but can’t sleep because he is so terrified.

The next day, the man is scared for his life. He is convinced he is going to die. After dressing he drives very cautiously to work, taking the quiet back roads, fearful of a collision. He doesn't eat lunch because he is scared of food poisoning. He avoids everyone because he is so sure he will be killed somehow. He jumps at every noise, starts at every movement and hides under his desk for part of the afternoon when a car in the street backfires. When he gets home, he steps through the door looking like a complete wreck. He finds his wife in the kitchen and gentle takes the carving knife in her hand and places it on the counter. "I've just had the worst day of my entire life!" he says to his confused wife.

“Well,” she says, "You think your day was bad, I came out of the front door to take Charlie to school and the milkman was dead on the doorstep."