- Sterling slips after Gross Domestic Product (GDP) downgrade
- Canadian GDP could weaken Canadian Dollar
By David Johnson
A report showing London house prices falling for the first time in eight years has been all over the news this morning. In context, that fall was just 0.6% on the year. I would guess, if you allow for a natural level of statistical variance, prices were mostly static. At the same time, a balance of 23 percent of businesses were confident about the future, but a minus nine reading was seen when measuring consumer confidence in the same way. Traders, unsure as to what this all means, let Sterling slide by half a cent against the Euro and a similar amount elsewhere ahead of this morning’s data.
That data saw UK GDP growth revised downward to just 1.5% from 1.7% previously forecast. Sterling slipped again on that news. However, mortgage approvals rose significantly; up 7.8% on the year. That underscores the growth in housing outside London and so much of the investment in London property is driven by overseas cash buyers, that there is an obvious disconnect between house price and mortgage data in the capital. Either way, this is not the kind of mixed data Theresa May wants to see ahead of next week’s Tory Party Conference, but she has much bigger fish to fry.
This afternoon brings Canadian GDP growth data and, in some analysis, that too is expected to be revised lower. The Canadian Dollar has had a buoyant week, so anything that unnerves traders could cause a big swing against the CAD.
The most significant US data this afternoon is the personal consumption and expenditure figures. As the Federal Reserve seems to be edging towards tighter monetary policy, they need to see consumer earnings and activity holding up, so these numbers are important. We will also get the Chicago Purchasing Managers’ Index and University of Michigan Consumer Sentiment indices.
And it hardly seems possible, but 50 years ago today, John Glenn splashed down in the Atlantic Ocean after becoming the first American to orbit the Earth in space. His whole journey, from blast off to touchdown, took just four hours and 56 minutes, but that was a longer period than the Russian Yuri Gagarin managed in 1961. The space race was in full swing. What a change their efforts made to the world! We can blame them and their teams for satellite TV, mobile phones, ballpoint pens that write upside down, Teflon, Velcro, etc. etc. etc… I now feel very inadequate, so I’ll wish you a great weekend and retire.
Also wishing you all a very happy:
A day to enjoy good coffee and cake – in moderation…