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March

Sterling still strong in spite of politics

Published: Wednesday 27 March 2019

  • Sterling still strong in spite of politics
  • NZD weaker as Reserve Bank of New Zealand turns dovish

By David Johnson

So it is multiple choice day for UK MPs as they try to agree a plan on Brexit. There is even talk of a vote to cancel Brexit. Now that would be a constitutional crisis. Surely the Queen would have to decline signing off something that was entirely against the will of the people as determined by what we were told would be a binding referendum? Or maybe there would be a challenge to that decision, but would it be taken to the Supreme Court in the UK, or the European Court of Justice? How ironic would that be?! The rest of the day will be a deluge of monkey business from MPs as they position themselves for greatest advantage. It would be nice if they thought about the public at some stage as well.
 
Sterling stronger despite political shenanigans
Sterling is a tad stronger on the news that we may be getting to a decision – of some sort – on Brexit and, in spite of all the embarrassing behaviour of those in politics, the economy is holding up well. Having said that, yesterday’s data on mortgage approvals showed some slowdown. I suspect no one will be too surprised, given what is happening in Westminster. There is no hard data today, so we are at the mercy of what happens at Westminster. Sorry.
 
New Zealand Dollar weakens as interest rates held
Overnight the Reserve Bank of New Zealand (RBNZ) left their base rate on hold at 1.75%. They also took a distinctly dovish turn in their rhetoric; stating that they view the next move in interest rates as being a cut. That understandably weakened the NZ Dollar as it reduces the yield on NZ bonds for investors. Sterling’s strength and the Kiwi Dollar’s weakness combined to mean we start today with the GBPNZD rate above 1.93 at the interbank level.
 
European Central Bank speeches aplenty mean weaker Euro
There have been a slew of speeches by European Central Bank (ECB) members this morning. Oddly, they seem to feel all is well in the Eurozone, but German data definitely disagrees with that optimism. The Euro is a little weaker this morning in spite of the attempts to talk it up.
 
US-China tensions take centre stage
This afternoon brings a few US Federal Reserve speeches and mortgage applications data. That is largely overshadowed by nervousness surrounding the lack of progress on talks between the US and China on trade. Mostly, traders and commentators will just wait for yet another random Tweet from the US President.
 
Who knew?
And there is a bizarre story in the Daily Mirror about a mother who had to admit to having a one night stand with someone other than her husband after her TWINS were found to have different fathers. Yes HER TWINS have different fathers. Who knew that could happen?


Efficiency Expertise
An efficiency expert concluded his lecture with a note of caution. "All I would add is that you need to be very careful about employing these principles outside of the office."
"Why?" asked somebody from the audience.
"Well, my wife is a terrific cook, but I started to notice the processes she employed," said the lecturer. "I noticed that she made lots of trips between the refrigerator, stove, the worktops and various cupboards, usually carrying a single item at a time. One day I told her, Darling, why don't you try carrying several things at once; collecting all the utensils and ingredients together before you start and then, once the meal is complete, put everything away in one short session? It would maximise the time available to cook and prepare and minimise the amount of time spent walking around the workspace.'
"Did it save time?" Asked the guy in the audience.
"Yes, it saved her a lot of time," replied the lecturer. "It used to take her 30 to 40 minutes to make our evening meal and now I do it in fifteen."

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