The major focus for today rests on the US, where initial jobless claims are expected to come in at 241K. The US Dollar was unmoved by the hawkish minutes from the Federal Open Market Committee (FOMC) that were released overnight and struggled to improve upon its recent strength. Although the FOMC minutes for the January meeting appeared bold, they failed to increase speculations of a March rate hike. As suggested in the minutes, many members judged that it would be "appropriate" to increase interest rates again "fairly soon". A few of them suggested removing policy accommodation in "a timely manner". However, there was no explicit indication that it would arrive as soon as March, perhaps the market could be guilty of not paying attention. Economic data in 2017 has been positive, with jobs, inflation and retail sales all coming in stronger than economists expected. Markets are buoyant; and if the tax cuts and fiscal stimulus promised by the Trump Administration materialise, the Federal Reserve risk being behind the curve if they don't act soon. For now, the chances of a hike next month are around 40%, however, if the Jobs Report next month continues its upward momentum; and stock markets keep rising; the odds will increase – and the US Dollar will strengthen.
The political landscape continues to evolve in the Eurozone, as Dutch voters will choose a new government next month; and if the polls are right, the right-wing Freedom Party of populist leader, Geert Wilders, is surging ahead of his rivals; and is set to win 35 seats. A quick calculation suggests almost three million people would vote for Geert Wilders. His stance and policies would be seen as a blow to the EU and in turn should cause Euro weakness, so this is certainly worth keeping an eye on. As he is unlikely to gain a majority and none of the other parties will commit to working with him, he almost certainly won't be forming a government; however, winning the popular vote would send shockwaves through the EU. The French election is a similar proposition, with Le Pen stating she might scrap the Euro altogether if she wins. Both elections will play major roles in global markets in the next few months, as politics, rather than economic matters, continue to dictate market direction, particularly for currency markets.
How to make a joke – European style…
Europe may be in the thick of political turmoil right now, but you can be sure each European nation is still enjoying telling jokes about the other. Certainly, we could all do with some light relief!
Last year, Romain Seignovert published a book, called De Qui Se Moque-t-On (“Who do we make fun of?”) about the jokes that Europeans tell about their neighbouring countrymen. He says that taking the Mickey out of our neighbours is a time-honoured tradition in Europe, reflecting the diversity within the European community and the rich and eventful history between nations. He should have experienced his fair share, being a Frenchman, who studied in both Germany and Spain, and now resides in Brussels.
The book features 354 jokes, many contributed by his blog followers. Some fun examples include:
“How do you tell an extrovert Finn? It’s your shoes he’s looking at, not his.” Because apparently, other Europeans think the Finns are shy.
The Italians, in contrast, are rather self-deprecating, with a good dose of home-grown humour. Case in point: Sign on Italian bus says “Don’t talk to the driver – he needs his hands”.
An interesting one from the Austrians on the Germans: “The main difference between the Austrians and the Germans is that Germans would like to understand the Austrians, but can’t, and Austrians understand Germans, but would rather not.”
And I’ll leave you with one from the Irish about us repressed British folk: “Diplomacy according to Brits: the art of telling people to go to hell in such a way that they ask for directions.”