Is confidence really returning? Depth of China Debt may unsettle recovery US employment data arriving a day early
Monday, 29 June 2009
Today's Highlights
Is confidence really returning? Depth of China Debt may unsettle recovery US employment data arriving a day early
FX Market Overview
Is there anything about Michael Jackson that we don’t now know? You know the news machine is running out of options when they have to interview celebrity lookalikes to get an opinion. Hopefully, now that the Sunday papers have devoted half a rainforest and two ink lakes to the matter, we can return to some semblance of proportion.
Michael Jackson’s sad and untimely demise will put a major dent in the earnings of the O2 arena and its management but in the overall scheme of things, most companies and individuals have enough to deal with already. You may have noticed, for example, that the global economy is still in the mire and that the road to recovery is a tad longer than the government ‘SatNav’ would like us to think. Each time we see encouraging data, the next piece of news whips the carpet out from under the growing band of optimists.
In amongst the Neverland stories this weekend also brought news of just how immense China’s debt levels are. That might seem a remote problem from the UK and US but China needs to be buying and growing if the global economy is to recover. The US and China are probably the two most influential trading countries and both have a voracious appetite for imported goods and materials. If the Chinese growth machine is out of action, then it will heap plenty more pressure on the US to consume our way out of global recession.
This week will give some clues as to the potential for America to do just that. We will get both business and consumer sentiment indices, a plethora of speeches from members of the Federal Reserve and Thursday brings the influential US employment report. This is being released a day early due to the 4th July Independence Day celebrations taking place this weekend and even a hint of increased levels of hiring may well boost the US Dollar significantly. We are expecting a slower pace of decline rather than any real jobs growth but that is probably enough to stop the slide in the US Dollar.
The rest of the week brings business and consumer sentiment from the UK, EU and elsewhere as well as both UK and Canadian economic growth data. We’ll also get an interest rate decision from the European Central Bank but that decision is almost certain to be ‘no change’.
In general terms, the Pound is holding up well even though it has slipped to the bottom of its recent trading ranges against the likes of the Australasian Dollars, the South African Rand and the US Dollar. It is doing rather better against the Canadian Dollar though in spite of increased oil prices which should assist Canadian Dollar Strength.
You may have noticed that I gently avoided speaking of the Lions tour but I can probably sum it up in three comments; (1) Schalk Burger should have been red carded, (2) South Africa are such a hard team to beat, especially on home soil and (3) you can’t give Morne Steyn penalty kicking opportunity anywhere on your side of the Bok’s posts. That boy can kick.
And Andy Murray is still on course to get to the Wimbledon final but in writing it down I have probably just jinxed the poor fellow. Enjoy the heat wave everyone.
Michael Jackson’s sad and untimely demise will put a major dent in the earnings of the O2 arena and its management but in the overall scheme of things, most companies and individuals have enough to deal with already. You may have noticed, for example, that the global economy is still in the mire and that the road to recovery is a tad longer than the government ‘SatNav’ would like us to think. Each time we see encouraging data, the next piece of news whips the carpet out from under the growing band of optimists.
In amongst the Neverland stories this weekend also brought news of just how immense China’s debt levels are. That might seem a remote problem from the UK and US but China needs to be buying and growing if the global economy is to recover. The US and China are probably the two most influential trading countries and both have a voracious appetite for imported goods and materials. If the Chinese growth machine is out of action, then it will heap plenty more pressure on the US to consume our way out of global recession.
This week will give some clues as to the potential for America to do just that. We will get both business and consumer sentiment indices, a plethora of speeches from members of the Federal Reserve and Thursday brings the influential US employment report. This is being released a day early due to the 4th July Independence Day celebrations taking place this weekend and even a hint of increased levels of hiring may well boost the US Dollar significantly. We are expecting a slower pace of decline rather than any real jobs growth but that is probably enough to stop the slide in the US Dollar.
The rest of the week brings business and consumer sentiment from the UK, EU and elsewhere as well as both UK and Canadian economic growth data. We’ll also get an interest rate decision from the European Central Bank but that decision is almost certain to be ‘no change’.
In general terms, the Pound is holding up well even though it has slipped to the bottom of its recent trading ranges against the likes of the Australasian Dollars, the South African Rand and the US Dollar. It is doing rather better against the Canadian Dollar though in spite of increased oil prices which should assist Canadian Dollar Strength.
You may have noticed that I gently avoided speaking of the Lions tour but I can probably sum it up in three comments; (1) Schalk Burger should have been red carded, (2) South Africa are such a hard team to beat, especially on home soil and (3) you can’t give Morne Steyn penalty kicking opportunity anywhere on your side of the Bok’s posts. That boy can kick.
And Andy Murray is still on course to get to the Wimbledon final but in writing it down I have probably just jinxed the poor fellow. Enjoy the heat wave everyone.
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