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February

Be ready for a further fall for the Pound

Published: Tuesday 12 February 2019

  • Sterling dips on poor Gross Domestic Product data but levels off
  • Aussie Dollar strengthens in spite of dire housing data
  • US markets eager for clarity
​​​​​​By David Johnson
 

Sterling softened a little yesterday after the release of the slowest economic growth data since 2009 and a further decline in business investment, too. In addition, manufacturing and industrial production data was just as poor. Traders soon realised that they weren’t at all surprised by the data and the fall in Sterling abated pretty quickly. With heaps of uncertainty over Brexit, slowing growth in the global economy and the Pound itself still being relatively weak, growth in the UK economy was bound to slow. The fact that it is still above recessionary levels is almost a bonus. We will hear Bank of England (BoE) Governor Mark Carney’s take on it at 1:00pm UK time. He generally weakens the Pound when he speaks, so be ready for that.
 
Australian Dollar stronger despite data – more volatility ahead?

Overnight we saw a sharp dive in Australian home loans. A 6.1% contraction is three times worse than the markets were expecting and reinforces the dovishness expressed by the Reserve Bank of Australia’s Governor last week. Oddly, business confidence was marginally higher. That, too, was released overnight.  The markets tended to favour the stronger business sentiment and the GBPAUD exchange rate fell a little in early trade. That rate is below A$1.82 as I write. We will see Australian consumer confidence data overnight tonight, so another volatile trading session is likely.
 
US markets eager for clarity

This afternoon is dominated by speeches from Federal Reserve voices. Amongst them will be Federal Reserve Chair, Jerome Powell. Traders and investors will hang on his every word as they yearn for clarity over the Fed’s interest rate plans.
 
A mother’s love

And in the ultimate embarrassment story, a woman in her 50s is being sought by police in Maryland, USA. There are complaints coming in that she has been spotted approaching female students at Towson University in Maryland, showing them a picture of her son and asking if they would date him for St Valentine’s Day. Ohhhhhhh MuUUum!

Riding high

After an early round of golf, four elderly ladies sat around in the club house, chatting and sipping tea. The club pro arrived, smiled at the ladies as he walked in and called, "Morning, ladies. How did your game go?”
 
The first lady said she had a good round and added that she actually had 25 riders. The pro was a bit perplexed not knowing what a ‘rider’ was, but before he could ask, the second lady quickly chimed in and said that she had a very good round as well, with 16 riders.
 
The third lady then said that her round was average and that she only had 10 riders. The fourth lady admitted that she played the worst round of the day and that she only had 2 riders all morning.
 
The pro was completely confused not knowing what the term ‘rider’ meant but, because he didn't want to look dumb, he made his excuses and walked away.
 
As he passed the bar, he asked the barman, "Mike, what on earth are those old girls talking about when they refer to ‘riders’? I’ve never heard that term before. Is it a new thing?"
 
The bartender smiled and said, A “rider’ is when you hit the ball far enough away to make it worthwhile moving the golf buggy.”

Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR All Day The Economic and Financial Affairs Council Meetings    
USD 15:00 US: JOLTS Job Openings 6.89m 6.84m

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