- RBA in no hurry to cut Aussie base rate
- GBPEUR bounces but maybe not for long
The Australian Dollar strengthened again overnight after the Reserve Bank of Australia made it pretty clear they are in no hurry to cut their base rate. They are, however, still very worried about the strength of the Australian Dollar but that is just lip service if they have no plans to tackle it and a rate cut would help tackle it. However, consumer confidence in Australia has pushed higher and that is not a condition under which interest rates are usually cut.
The Sterling – Euro exchange rate has bounced a little over the last few days. Perhaps this is a delayed reaction to poor EU data last week and perhaps a bit of profit taking after weeks of Sterling weakness but most likely a combination of these two factors plus an expectation of better UK data this week and nervousness ahead of the European Central Bank's interest rate decision on Thursday. Incidentally, there is a lot of talk about the words of German Finance Minister, Wolfgang Schäuble who has been very critical of the ECB's low interest rate policy. Many across Europe see Germany as the only economy that could tolerate high interest rates in the current environment and some have commented that Germany is trying to steal export sales from its peers in a very tense post-recession period. All is not well in the House of EU. We will get the well-respected ZEW economic sentiment indices today for the Eurozone and for Germany. Both are expected to show improvement, so beware of Euro strength in the morning trading session.
The UK vote on EU membership is barely more than a month away and the scare mongers are unashamedly out in force. The Chancellor of the Exchequer is under a lot of scrutiny over a formula he vaunted as being proof that all Brits would be worse off if we vote to leave the EU. The formula and its explanation are being described as gobbledegook but in the most recent poll, 56% of respondents said they would vote to stay an EU member. Maybe the gobbledegook is working.
This afternoon brings US house market data which is forecast to be mixed, so we are not expecting anything dynamic from the US Dollar. However, oil markets are all over the place with no agreement on production limits but a strike by Kuwaiti oil workers dampening production anyway. The US Dollar is susceptible to energy market volatility, so that's one to watch.
And with the premier league football season edging towards one of the most interesting conclusions in decades, spare a thought for Gloucestershire team FC Barometrics of the Northern Senior League Division One. During their game on Sunday, 5 team members were sent off meaning the game had to be abandoned in the 71st
minute with the score finely balanced at 3-3 against Sharpness. It seems it is tough being a referee in Northern Senior League Division One. A job in the UN beckons.
Room Mate Problems
A car carrying the Chief Rabbi, a Hindu Fakir and Kanye West back from a conference on modern theology breaks down in a remote part of the Rocky Mountains. The weather is appalling, so there is no chance of any kind of rescue vehicle at this time of night, so the three get their coats on and trudge to the nearest property they can see on a nearby hill.
The farmer who answers the door takes them all in and gets them warm drinks as they sit by the log burner. They ask the farmer if there is any way they can stay the night and he is very welcoming but says, there is only the one spare room with a single bed and the sofa to sleep on so someone will have to stay in the barn.
The Chief Rabbi says he will do that. "My people wandered in the desert for 40 years, I am sure I can cope with one night in a barn," he laughed and headed out to the building across the yard. A few minutes later he knocks at the door and says, "I am very sorry but there is a pig in the barn, I would be very grateful if I could swap with one of you."
The Fakir says he has lived in poorer conditions than this in the wilds of India, so he is happy to take the Rabbi's place. He heads out into yard but a few moments later he reappears saying, "I am sorry, there is a cow in the barn and to my people, these are sacred creatures. It would be an imposition if I were to take some of her space".
"Alright, alright", says Kanye West. "I'll sleep out in the barn". He heads out into the night and a few moments later there is a knock at the door. When the Rabbi opens it, he finds a cow and a pig.
Today's Major Economic Releases
||US: Housing starts, k saar
||US: Building starts, k saar
||RBA Gov Stevens speaks
||BOE Gov Carney speaks
||BOC Gov Poloz speaks
Daily Currency Insight by David Johnson
Daily Currency Analysis with Charlie Horsley
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