- Sterling recovers despite poor Confederation of British Industry (CBI) report
- Euro awaits stream of Purchasing Managers’ Indices (PMI)
By David Johnson
Well, the forecasters got it very wrong on the CBI industrial trends survey. Most had expected a rise in the survey index, but the real result was a very pessimistic minus 2 reading. In spite of this, Sterling gained through Monday. Better news on the Brexit front could take the credit, but there was some positive rollover from last week’s improved government borrowing data. There is a distinct lack of data from the UK today, so the Pound is likely to shuffle, but not strike out in any new direction.
Eurozone consumer confidence improved a tad this month, but the index only rose from minus 1.2 to minus 1.0, so it is hardly game changing. Nonetheless, the Euro held its own on Monday. Tuesday brings a plethora of business sentiment indices from across the Eurozone and that ought to enliven the limp Euro. The forecasts are generally good, so there may be room for Euro strength. By the time you read this, some of those reports will be out and the mood may be obvious.
It is a similar story in the US this afternoon; a stream of sentiment indices and the forecasts are also good. The USD has been volatile of late as the Federal Reserve prepares to hike the base rate and North Korea continues to drone on about how big and tough they are. Some playground bullies just never grow up. The Dollar is likely to gain some strength if the forecasters are anywhere near correct.
Overnight tonight there is a wealth of news from Australasia. New Zealand published employment data, which should cause some NZD strength after the week of political wrangling that weakened the Kiwi.
Australia releases the latest consumer inflation data and that is expected to have ticked higher. An annualised 2.0% would start to make the Reserve Bank of Australia stop talking about rate cuts and start thinking of hikes but some, if not all of the inflation rise can be put down to a weaker Australian Dollar. So maybe they will sit on their hands for a while longer. The Aussie Dollar will strengthen though if the rate is 2% or higher.
And I loved this story. Cambridge University posted on the web a thesis written in 1966 by a 24 year old and it crashed the University’s website. I guess the fact that the 24 year old was Stephen Hawking helped and the fact that it was his seminal work titled ‘Properties of expanding universes’ did too. Professor Hawking was characteristically humble in his response to the excitement. He said, “hopefully they won't be disappointed now that they finally have access to it.”
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