- Sterling rebounds ahead of Confederation of British Industry (CBI) report
- Euro flat as anti-EU sentiment rises
- US and UK Gross Domestic Product (GDP) data due this week
By David Johnson
This week is off to a slow start on Monday but will pick up with the first estimates of UK and US Gross Domestic Product (GDP) growth in quarter three. The forecasters suggest 1.4% or thereabouts for the UK is expected and 2.5% for the US. Hence, there is enough uncertainty to keep the Bank of England on hold when they meet on 2nd November and enough reason for the Federal Reserve to look at tighter monetary policy when they meet on the 1st November. Sterling held up in spite of strong selling pressure last week. Brexit shenanigans were behind the fall earlier in the week, but the recovery seems quite well supported. This morning’s Confederation of British Industry (CBI) industrial trends report may well further strengthen the Pound.
The Spanish Prime Minister has announced plans to abolish Catalonia’s local government following the ‘illegal’ independence referendum. That met with a demonstration by nearly 500,000 people. The Euro doesn’t seem to have been majorly unsettled by the news, but it is part of a growing story of anti-EU sentiment. We saw that in Austria and we are now seeing a Eurosceptic leader seemingly heading for success in the Czech Republic. I still call it that, by the way, the suggested new name of Czechia doesn’t appear to have caught on. But, I digress; the regions of Lombardy and Veneto in Italy both voted over the weekend for greater local government in the wake of Catalonia’s efforts.
The fact is, it is not only the UK that is wary of the growth of the EU. Brexit may have been the wakeup call that the EU snoozed, but they can’t continue to ignore the distrust being felt by others within the EU. If the EU is able to change, it needs to happen soon. Meanwhile, the Euro sits around the €1.12 level against the Pound and $1.17 against the USD ahead of this afternoon’s Eurozone Consumer Confidence Index, which should show a minus 1.1 index reading. i.e. EU citizens are the opposite of confident.
The US Federal Reserve Chairwoman, Janet Yellen, is in the mix to retain her job for another four years but Donald Trump is looking at other candidates and is thought not to be a fan of Mrs. Yellen. That uncertainty, at a time when the global economic recovery is uncertain, is weighing on the USD.
And, if your morning has been fraught or challenging so far, spare a thought for the royals. A schedule of Princess Margaret’s 1950s morning routine has emerged in Ma’am Darling by Craig Brown. Précised; it shows:
9am – Breakfast in bed, followed by another two hours in bed reading the papers and listening to the radio
11am - an hour in the bath followed by hair and makeup and then donning freshly laundered clothes
12.30pm – go downstairs for a vodka pick-me-up
1pm – four course lunch with the Queen Mother.
This was an everyday routine. I think I could work like that, given the chance.
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