- UK manufacturing much stronger than forecast
- Mixed EU data leaves Euro unchanged
By David Johnson
In a shock move, the EU has voted to become part of the United Kingdom and adopt the Pound as its currency. European Commission President, Jean-Claude Juncker, explained, “The EU project has clearly failed. So we have decided that the UK economy, which is out-performing our own, in spite of the threats we outlined regarding Brexit, is the best place for the 27 states of the EU to be housed. We will join the United Kingdom and become subjects of her majesty, Queen Elizabeth II, on this day 1st April 2019. I have been very disparaging about Britain in the past few years, but I take it all back and I am sorry.”
Happy April Fool’s Day!
Crunch week for Brexit
In the real news, well, it’s Brexit, Brexit and more Brexit. UK Prime Minister, Theresa May, has a new coat that doesn’t look like her sleeves were cut off and replaced with a duvet. This is yet another crunch week. The Prime Minister will seek some resolution on a path forward and needs to do so pronto after Parliament rejected yet another version of her exit plan. The Likelihood of a World Trade Organization (WTO) rules Brexit is looking stronger now and the Pound reacted by weakening but bouncing back, as has been the pattern of most news in the last month. Other than this and this morning’s stellar Manufacturing Purchasing Managers’ Index (PMI) data, we will have nothing to focus on for the Pound today.
Euro unmoved by data disappointments
This morning brought disappointing numbers on the Italian, French and German manufacturing PMIs, whilst the Spanish data gave a surprising and contrarian improvement. The rest of today’s EU data takes the form of consumer inflation and the unemployment rate. The inflation number is likely to be around 1.5%; very manageable for the European Central Bank (ECB) and unlikely to move the market. Unemployment remains stubbornly high in the EU. The overall 7.8% is well above the US and UK and masks a huge disparity between strong German data and excessively high Greek and Spanish data. The Euro traders were unmoved by the data, as was the Euro itself.
US-China talks take centre stage once more
We will get the US manufacturing PMI later, as well as what are expected to be mixed results on the US retail sales figures. The US versus China trade talks are more significant than either data release and they are ongoing.
New Zealand Business Confidence could prove negative for NZ Dollar
Overnight we will get the New Zealand Business Confidence Index for Q1. That is, like other recent New Zealand data, likely to be a negative one. The Reserve Bank of New Zealand (RBNZ) is still weighing up the potential for rate cuts and this will be another weight on that end of the scales.
Have a great week, whatever the political weather!
A woman had prepared a meal for a number of her husband’s workmates and their wives, including his boss. She had slaved over a stove in the kitchen for hours.
At the table, she turned to her six-year-old daughter and said, "Would you like to say the blessing?"
"I don’t know what to say," the shy girl whispered.
"You know,” said her mum. “I talked you through it earlier. Just say what I said. It starts with ‘Dear God…’”
“Oh, I know!” said the excited girl. She put her hands together and bowed her head and everyone at the take dutifully followed suit.
With her eyes shut tightly, the daughter started, “Dear God, why am I stuck with cooking for all these damned dreary freeloaders?”