- Hints of further QE from the ECB
- Sterling slack despite buoyant wages data
The Brexit story rumbles on. The EU are like, "we aren't negotiating," and the Labour party are like, "we wanna ban 'No deal brexit'," and Boris is like, "let's just leave and be done with it guys," and Gove is like, "sniff". Whatever the banter, no agreement is happening until Britain has a new Prime Minister and that is another melee we are best to ignore right now. Sterling is smouldering at the bottom of its recent trading ranges; needing a catalyst to get it moving again. Yesterday's announcement of better than expected wage price growth and 32,000 fresh jobs being created wasn't enough to do it and a lack of data today means we'll have to wait.
News of the demise of quantitative easing has been grossly exaggerated. The head of the Bank of Finland has suggested the European Central Bank stands ready to embark upon further asset purchases to pump cash into the Eurozone banking system if the need arises. With their base rate at zero, they have few other options but traders haven't reacted to this news yet. We have speeches from a number of ECB members this morning; maybe they can shine further light on the concept. The Euro remains unmoved.
The US Dollar is weaker against most other currencies but Sterling's slackness is holding the GBPUSD back. The general USD weakness stems from the ongoing trade dispute between China and the US but is enhanced by rising gold prices (also partly due to the Sino-US dispute) and elevated oil prices which is more of a supply and demand issue. The USD may be moved by this afternoon's consumer inflation figures though because the Federal reserve is getting twitchy about whether to cut their base rate again and a 2.1% inflation rate is OK for that but anything higher would put that plan in doubt.
And those hardy souls taking part in this weekend's London to Brighton Bike Ride will, no doubt be delighted to know that it was on this day 212 years ago that Karl Von Drais first hobbled out on his Dandy Horse, the forerunner of today's bicycles. You will, probably be cursing the man when you get to the top of Ditchling Beacon but it will be good to know who you should be swearing about.