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Sterling unmoved by government borrowing data

Published: Wednesday 24 April 2019

  • EU business confidence slides again
  • Bank of Canada interest rates likely on hold

Interest rate cut more likely in Australia

The chances of an interest rate cut in Australia grew early this morning when Australian consumer inflation was announced as just 1.3% on the year to March; down from 1.5% in Q4 and 1.8% in Q3. The Reserve Bank of Australia will heard a lot of calls to cut rates and stabilise the economy. There are few reasons not to. The Australian Dollar is weaker, as you might expect. Good news for AUD buyers and therefore for those buying Australian exports; a partial counterbalance in itself. 

Euro weakens against its currency pairings

In the EU, we have seen a drop in French and German business expectations surveys this morning. The Euro has slipped against the already strong US Dollar but is largely unchanged against the Pound. Most analysts would have expected that kind of result, so the rumour drove the market rather than the actual data. Mind you, a report from the Recruitment and Employment Confederation has confirmed that businesses are concerned about that B word thing but are also planning fresh recruitment. As they say in The United States of Trumpland, go figure. 

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Sterling unmoved by recent data

Sterling traders were hoping it would get a boost from yet another strong government debt report this morning. They reported a large surplus last month because that was the tax year end and all then last minute tax receipts arrived. The April and May data is usually positive as well.  The actual date was a ted worse than expected but Sterling probably won’t react too much because there is another matter hanging over the currency markets. I won’t mention it but it starts with a B and the uncertainty it emits pervades the markets like a stiff cold breeze on a February morning. 

Canadian data ahead

This afternoon brings the Bank of Canada’s interest rate decision plus the statement and press conference. We are not expecting any change in the 1.75% base rate but the statement is always worth a listen to try to assess the direction of travel on monetary policy. A bit of Canadian Dollar volatility is likely.  
Not much data from the US today

US data is light today, so traders will be hoping for news about the US v China or US v EU trade standoffs. The rest of the week will throw us the US GDP data which is likely to show quite a sharp drop in their economic growth rate and a swathe of other data releases. 

Embarrassing abandonment

And Reuters are reporting that Kenyan police are investigating after their own rifles were stolen but the circumstances are even more embarrassing. It seems that a number of officers had left their post to watch football in the nearby shopping mall when thieves broke into their abandoned post and walked away with their weapons and ammunition. Woops-a-daisy.

New Mum

Taking advantage of amazing new technologies, 86 year old single-parent Agnes gave birth to a beautiful baby boy. The day after she was allowed home from hospital, her sister called to the house to meet her new nephew. Agnes invited her in, took her to the lounge and asked her if she wanted tea. “No, I am fine,” said Mary. “I just can’t wait to see little Bobby.”
“All in good time,” said Agnes. “Let’s just catch up for a while and then you can see him.”
After 30 minutes of small talk, Mary asked again if she could see the baby. 
“Soon,” said Agnes before boiling the kettle for another cup of tea and bringing some biscuits in. 
Another half an hour past and Mary asked again. 
“Wait until he cries,” said Agnes. 
“Sorry Agnes,” queried Mary, “Why are we waiting until he cries?”
“Well, to be honest,” said Agnes, “I’ve forgotten where I put him.”
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