13:30pm US Q1 Current account 13:30pm US May Consumer price index 21:00pm Bank of England Governor King speaking at annual Mansion House dinner
Wednesday, 17 June 2009
Today's Highlights
13:30pm US Q1 Current account 13:30pm US May Consumer price index 21:00pm Bank of England Governor King speaking at annual Mansion House dinner
FX Market Overview
Better than expected UK employment data this morning surprised many who had expected unemployment to have increased by 65,000 workers. The actual increase in the claimant count was 39,300, a fresh 12-year high which increases the total unemployed to 2.26 million. Many economists think unemployment could eventually reach 3.0 million, so this slowdown in pace was most welcome but did little to support the pound which has come under pressure this morning falling 2 cents so far.
The Bank of England (BOE) minutes this morning predictably showed that all 9 members voted for interest rates to be left on hold in June at 0.50%. BOE Governor Mervyn King and Chancellor Alistair Darling both speak tonight at the annual Mansion House dinner in the City. These speeches have been known to move the market in the past, however tonight’s speech is likely to be more a warning by the Chancellor to banks and regulators that there will be no excuses next time and that lessons must be learnt to avert another financial crisis in the future.
In New Zealand overnight the Reserve Bank Governor Alan Bollard did his upmost to jaw-bone the Kiwi dollar lower by saying “the strengthening NZ dollar was working against the country’s recovery”.
A report overnight revealed that China, who holds 70% of their foreign exchange reserves in US treasuries, reduced their holdings in April for the first time in 10 months. There has been a lot of speculation recently about central banks selling out of US treasuries especially after Russia triggered a sell-off in the dollar yesterday when they suggested a need for a global reserve currency other than the greenback at the BRIC summit.
This afternoon we look to May CPI inflation data to see whether the stronger inflation we saw in the UK yesterday is repeated stateside. The expectation is for a rise of +0.3% on the month and -0.9% on the year.
Also out at 13:30pm we expect to see a marked improvement in the US current account deficit as the recession reduces US domestic demand for imports while exports stay roughly the same.
In the spirit of gender-equality, male-only carriages are to be introduced on Tokyo trains. Many trains in Tokyo have women-only carriages which were introduced in an attempt to prevent men from groping women during the rush hour. I can’t imagine too many males being groped by females on the train but I suppose it can happen if you spray yourself enough with Lynx deodorant. Those TV ads are true aren't they?
The Bank of England (BOE) minutes this morning predictably showed that all 9 members voted for interest rates to be left on hold in June at 0.50%. BOE Governor Mervyn King and Chancellor Alistair Darling both speak tonight at the annual Mansion House dinner in the City. These speeches have been known to move the market in the past, however tonight’s speech is likely to be more a warning by the Chancellor to banks and regulators that there will be no excuses next time and that lessons must be learnt to avert another financial crisis in the future.
In New Zealand overnight the Reserve Bank Governor Alan Bollard did his upmost to jaw-bone the Kiwi dollar lower by saying “the strengthening NZ dollar was working against the country’s recovery”.
A report overnight revealed that China, who holds 70% of their foreign exchange reserves in US treasuries, reduced their holdings in April for the first time in 10 months. There has been a lot of speculation recently about central banks selling out of US treasuries especially after Russia triggered a sell-off in the dollar yesterday when they suggested a need for a global reserve currency other than the greenback at the BRIC summit.
This afternoon we look to May CPI inflation data to see whether the stronger inflation we saw in the UK yesterday is repeated stateside. The expectation is for a rise of +0.3% on the month and -0.9% on the year.
Also out at 13:30pm we expect to see a marked improvement in the US current account deficit as the recession reduces US domestic demand for imports while exports stay roughly the same.
In the spirit of gender-equality, male-only carriages are to be introduced on Tokyo trains. Many trains in Tokyo have women-only carriages which were introduced in an attempt to prevent men from groping women during the rush hour. I can’t imagine too many males being groped by females on the train but I suppose it can happen if you spray yourself enough with Lynx deodorant. Those TV ads are true aren't they?
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