Donald Trump pulled the USA out of the Paris Climate Change agreement, accusing other countries of ganging up on America to benefit their own economies. Meanwhile, a Mexican businessman is planning the launch of a new product with the brand name Trump. The product is toilet paper and 30% of the profits are being donated to projects that support Mexicans deported from America.
Moving swiftly on, the US Dollar ignored Trump’s announcement, but it did strengthen a little after the private payroll report from ADP was rather upbeat. If today’s official employment report is equally upbeat (a jobs gain of 200,000 or more) then the USD will strengthen in expectation of a June interest rate hike from the Federal Reserve.
Sterling had a better day yesterday after stronger than expected manufacturing data. However, those gains were muted by the impending UK election and the narrowing of Theresa May’s poll lead. Next week is going to be a very volatile one; of that there is little doubt. Likely outcomes include a dive in the value of the Pound if the Conservative majority is lost, a strong rise in Sterling’s value if the Conservative majority is increased and a slump in Sterling if there is no clear winner. Risk averse Sterling sellers may want to get some of their requirements covered in advance of Thursday’s vote and then put on their tin hats and hide under the table. Today’s release of the construction sector Purchasing Managers’ Index (PMI) is unlikely to support the Pound. The forecasts are for a small dip, but for the index to remain in positive territory.
Other than these very meagre offerings, our data diary today is about as busy as a dry cleaner in a nudist colony. With the UK election, the European Central Bank (ECB) interest rate decision and a Gross Domestic Product (GDP) estimate from Britain’s National Institute of Economic and Social Research (NIESR) next week will offer plenty to talk about. Brace yourselves.
And the Premier of Western Australia has instructed the state’s solicitors to drop a case against a potato grower who gave away 200 tonnes of potatoes because he had exceeded his quota and couldn’t sell them. There are claims and counter-claims going on in this dispute, with the grower suing the Potato Marketing Council for anti-competition actions. The grower, Tony Galati, owner of Spudshed, is well known to the authorities, having fallen foul of their quota regulations a number of times over the past few years. He said, “We’re going to grow spuds, sell them, and like I said, no one is going to stop us.” Fighting talk, eh?
“Hello, this is Ace Recruitment, How can I help?”
“Good morning. This is Michael Baker, CEO of Baker and Baker. I need you to find me an economist, but I need to be very specific. I only want an economist with one arm.”
“So, Mr Baker, let me get this straight. You want to hire an economist but you are specifically after a disabled economist. Is that right?”
“It is more specific than that. I am seeking an economist who only has one arm.”
“Well, I can certainly look on our books and see who we’ve got, Mr Baker but it may take some time. I can’t imagine there are too many economists out there who only have one arm. Can I ask why you want to hire an economist with just one arm?”
“Well, I have employed a lot of economists over my years in business. You have supplied some of them, in fact. However, every one of them has a problem. When I ask them for their opinion, they always start their answers with, ‘Well, on the one hand…….'"