• US employment data much stronger than expected
  • Chinese inflation spikes but all eyes on Coronavirus

 

Friday’s US employment data was full of surprises. 225,000 new jobs were created in January and that’s a good thing and the revisions for the 2019/20 year showed a growth of half a million jobs. The US Dollar barely twitched on the great headline number but has strengthened a little in early trade this morning. In addition, wages are still rising at 3.1%; well above inflation (currently 2.29%).

So the Federal Reserve has further reasons to either leave the base rate on hold or perhaps even to raise the base rate; contrary to the wishes of the White House. Hence the USD starts Monday at $1.2890 against the Pound and $1.0946 against the Euro.

 

Stock market chart and 100 US Dollars banknote.

Stock market chart and 100 US Dollars banknote. US Dollar grows on employment data.

 

More positive employment data from Canada

And the jobs report from the US wasn’t the only positive employment data on Friday. Canada added 34,500 fresh jobs in January; more than twice the market forecast and Canada’s unemployment rate fell to a record low 5.5%.  That’s an extraordinary level, given the geographical limitations on labour movement in such a sparsely occupied country.

 

Ongoing election brings uncertainty to the Irish economy

Storm Ciara whooshed into Britain and Ireland but was less disruptive than the forecasters had predicted; as is so often the case these days. Of more concern for the Irish economy is the uncertain outcome of their election. A three party system is emerging and Leo Varadkar’s future is anything but certain.

 

Not much data expected today

Besides the employment data released on Friday, on this side of the Irish Sea, it is business as usual. Who will the government reshuffle throw out? What is the next step on the EU-UK trade discussions? And, as there is very little data due for release today, that is likely to be the central conversation today.

 

Chinese inflation higher than forecast

However, we did see a substantial upturn in Chinese inflation. The annual level of 5.4% was well above last month’s 4.5% and higher than the forecast 4.9%. One swallow does not a summer make but that was some respite for those who watch Chinese data as a bellwether for the rest of the global economy. What we don’t know is what the Coronavirus will do to next month’s data. With more cities being shut down and with people being unable to get to shops which have fewer products anyway, the retail sector and manufacturing will all have been impacted.

 

New record

And as part of the winter festival in Steamboat Springs, Colorado, on Saturday, a 26 foot long tube launched a 2,800 Lb firework at 300 MPH which exploded just over a mile in the sky. That’s a record and, with the concern over that one firework’s carbon footprint, it may never be surpassed. I think I heard it in East Sussex but that may just have been a tree being blown over.

 

Inside

“Why are you in here?” says one prisoner to another.

“Well let me tell you. I was a top accountant. I used to live the life of Riley. I wintered on the Riviera, had a boat, a Bentley and a Range Rover, went out with the most beautiful women and I ate in all the best restaurants across London, Paris and Milan. ”

“Yeah but why are you in here?” asked the other prisoner.

“That damned Riley spotted the hole in his accounts.”