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May

Sterling unmoved by GDp growth improvement

Published: Monday 13 May 2019

  • Sterling unmoved by GDp growth improvement
  • US v China talks brinksmanship is escalating
  • Central Bankers rule the roost today‚Äč
 

The US President says China loves ripping off America and is set to impose another bout of tariffs in Chinese imports which will make pretty much all Chinese goods more expensive in the US. Understandably, critics are citing the fact that US citizens are the ones being penalised by these added costs but the President disagrees. Either way, trade talks continue between the US and China amidst these provocative tactics. The USD and Chinese Yuan are largely unmoved by the theatrics. 
 

In the UK, there are two big issues; entirely intertwined though. Brexit negotiations between the Tory and Labour parties are going about as well as a naturist convention in a Siberian winter. The pressure is on though because, if the polls are right, they are both going to be wiped out by the Brexit Party in the EU elections…if they are daft enough to let them go ahead. No one likes being humiliated, especially not MPs; although they are prone to regularly humiliating themselves without any outside interference. Sterling is a little downbeat while the interminable navel gazing continues. However, we see spikes any time a final deal is mooted, so be ready for the rally in the pound if that does happen. The Pound starts the week at roughly €1.16 and $1.30. Friday's GDP data rise was explained away as businesses stockpiling ahead of a Brexit final date, so the Pound failed to capitalise on it.  
 
Strong Canadian employment data on |Friday boosted the Canadian dollar, as you would expect it to. Commodity markets are also holding up well in spite of China's slowdown, so the CAD is benefitting from that as well. 
 
That is at odds with the Australasian Dollars which are both weaker as their respective central banks have adopted a negative tone. The RBNZ cute their base rate last week and the RBA is expected to do the same - possibly at their next meeting. 
 
 
Today is largely dominated by central banks. We have speeches from members of the US Federal reserve, the Bank of Canada and we have already had a speech from a Reserve Bank of Australia member this morning. 
 
And I love the story of fake stamps beading the image of Labour MP Dianne Abbott which are apparently making their way through the Royal Mail system.  It would be funnier if the image was of her with a can of Mojito in hand but it is funny enough. 

 

Tactics

A guy was on trial for murder in the USA and he faced the electric chair if he was found guilty. His brother found out that one of the jurors was a little bit simple but was a very large imposing man; not to be messed with. The brother considered that if he bribed this guy to convince the other jurors to reduce the finding to manslaughter, he could save his brother's life. He caught up with Duke (the big guy) and offered him $10,000 if he could convince the rest of the jury to bring in a verdict of manslaughter. 
 
At the end of the trial, the jury was out an entire week but, lo and behold, they  returned with a verdict of manslaughter.
 
The next day, the brother went to Duke's house, told him what a great job he had done and paid him the $10,000. He said, "I don't know how you did it Duke but I am very grateful".
 
Duke replied. "It weren't that easy, I can tell ya'll. The rest of them jurors took some convincing. They all thought he was not guilty and wanted to let him off but, sure enough, I convinced 'em for ya." 

 

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