- Aussie interest rate cut to record low
- Federal Reserve Chairman to speak
After I had submitted the daily report yesterday, the UK manufacturing PMI was released at it turned out to be the worst result in 34 months for one reason and one reason only. It begins with a B and rhymes with 'flex it'. It was knocked again overnight by a sharp downturn in the British Retail Consortium's survey. The 3.0% decline in the year to May was far worse than the markets had envisaged. Sterling stabilised around €1.1250 and $1.2670, which is where it sits this morning.
Overnight, the Reserve Bank of Australia did as was expected and cut its base rate from 1.5% to a record low of 1.25%. They also signalled that another cut is likely in August. Normally that would have weakened the Australian Dollar but the markets were so confident this rate cut was coming, they had acted before the fact and the post decision reaction was muted. The GBPAUD exchange rate is right in the middle of its 2019 upward trend around AUD 1.8150. We have a speech from the Governor of the RBA at 10am GMT, so that'll be interesting.
Eurozone inflation data is expected to have slipped to 1.0% on the year to May when the figures are released at 10.00 GMT. We aren't expecting any real change in the Eurozone unemployment level of 7.7% in spite of some slight improvements of late across the currency sharing bloc. The Euro is fairly unperturbed at the moment and that may well continue through Tuesday.
We have three speeches from US Federal Reserve members this afternoon, so the USD traders will be on standby. The Fed Chairman, Jerome Powell is amongst them; his words will obviously carry the most weight. Data-wise, we only have factory orders figures to contend with. That is expected to deliver contraction in the volume of orders; a negative for the USD if the forecasts are accurate.
Overnight we will see the release of global dairy index; a very significant piece of data for the dairy exporting nation of New Zealand. Some recovery from last month's minus 1.2% would strengthen the Kiwi Dollar, so beware of that.
And scientists have explained why tigers are orange even though you would have though blending into the jungle would make more sense. It seems that, through the eyes of their main prey, deer, who cannot see red, tigers actually look green. This could have far reaching implications for certain people. Donald Trump, Katie Price, Pamela Anderson and the cast of most 'reality' shows could sneak up on deer without being spotted. It could be a whole new career for them as gillies. Who'd have thought it!