by Intex Neville | Jan 8, 2020 | Uncategorized
• US NONFARM PAYROLLS
• UK GOVERNMENT BACK EU DEAL
• US HOUSE VOTES ON WAR POWERS
Traders will be waiting for today’s employment data, due an hour before the US open. US Non-Farm Payrolls are expected in at 165K down from November’s reading of 266K. The US ADP numbers this week significantly increased over expectations and our analysis shows that US tax receipts for the month of December were the largest in 36 months from which we conclude, that there was a significant job increase or wages have risen. UK business increased their permanent staff count for the first time in a year, which some will attribute to certainty over the next 5 years with a Tory majority government, giving business more confidence.
The UK government was able to pass the European Union Bill yesterday, allowing PM Johnson to get a step closer to leaving the EU at the end of January with a deal, minimising UK economic disruption. The Withdrawal Agreement is now with the House of Lords and is likely to become law in the coming weeks.
The US House of Representatives voted to limit President Trump from further military action against Iran without consent from Congress. This is unlikely to pass when the measure is voted on by the Senate which is controlled by Trump’s Republican Party. Reports came in last night that Israel targeted Iranian weapons within Syria close to the Iraq border. The Ukraine Airline Boeing 737-800 which crashed and killed all on board just after the retaliatory Iranian missile strikes, is thought to have been accidentally brought down by a Russian made SA-15 Gauntlet (Tor-M1) missile system which is used by Iranian forces. Tensions in the area are likely to stay high as Canadian and British passengers were onboard.
by Intex Neville | Dec 20, 2019 | Uncategorized
• EURO DECLINES
• CANADIAN RETAIL SALES DISSAPOINT
• US CORE PCE & GDP IN LINE WITH EXPECTATIONS
A couple of big moves came today with the EURUSD dropping from the weekly/daily pivot resistance level of 1.1120, on the back of the UK House of Commons voting on PM Johnson’s Brexit deal and a stronger US dollar. US 10 year yields were down on the day whilst US equities continued to make all-time highs.
This afternoon the disappointing data out of Canada with a fall in Retail Sales MoM (Oct) -1.2% v’s 0.5% Expected, sent the Canadian dollar crashing. There has been a fall in economic results this month out of Canada and this Retail Sales number combined with a poor employment report will give the Bank of Canada concern. Earlier the US House voted 385 v’s 41 to approve the USMCA trade agreement and the BoC will need trade to pick up if it is to keep rates on hold as they did earlier this month.
US Core PCE rose in line with expectations with healthcare services inflation helping it to rise +0.1% MoM and +1.6% YoY. Increased consumption, rising wages and a narrowing trade balance are all positives for the US economy and earlier today the US Senate passed a two-bill spending package; which firstly avoids the need for a government shutdown but is also a fiscal expansion, with President Trump signing a $738 bln Defense Spending Bill.
by Intex Neville | Dec 18, 2019 | Uncategorized
• CABLE RETRACES ALL OF THE ELECTION MOVE
• US EQUITIES AT ALL TIME HIGHS
• US INCREASED SPENDING TO AVOID GOVT. SHUTDOWN
ECB President Christine Lagarde is first up today. It follows her first speech last week that caught some market participants off guard. The Euro has outperformed other currencies this week and it could be Lagarde now shifts to a dovish tone to avoid too much strength in the single currency.
Focus then shifts to UK CPI that is set for released at 09:30 and is expected to show prices to have risen by 1.4%. Political uncertainty triggered a Sterling sell off this week as fears of a no-deal Brexit are reignited. Sterling has dropped from 1.3520 to 1.3072 on the back of this and poor economic data released this week has done little to stop the selling. Any hints inflationary pressure is easing will weigh on the pound further.
In the US – President Trump is most likely now to become the 3rd POTUS to ever be impeached and he has gone on the offensive to remind his voters that not only has the Stock Market hit a record high it has done so 133 times in less than 3 years. Yesterday the House of Representatives added to their already increased spending plans by approving a further $1.4 trillion spending package.
by Intex Neville | Dec 17, 2019 | Uncategorized
• CABLE TOUCHES PRE-ELECTION LEVELS
• A MIXED UK JOBS REPORT FAILS TO PROVIDE RELIEF
• EUROPEAN EXPORTS RISE
• CANADA MANUFACTURING SALES DISAPPOINT
Robust US economic data was the main theme of today. US Job Openings, Industrial Production, Housing Starts and Building Permits all beat expectations that gave risk appetite a boost with stocks trading close to record highs. The Dollar continued to outperform with the Euro the
only exception.
US President Trump, who had been quiet this week took to Twitter today to add pressure on the Fed to shift to a more dovish stance. Trump stated "Would be sooo great if the Fed would further lower interest rates and quantitative easing. The Dollar is very strong against other currencies and there is almost no inflation. This is the time to do it. Exports would zoom!"
Earlier in the day, the UK labor market remains robust with unemployment falling to 3.8%. Despite this, there still seems slack in the labor market with little signs of wages to rise. The Pound in response to political news has given back all the post-election rally gains with traders now focused on the psychological 1.30 level.
