China dumping US treasuries

Today's Highlights

Aussie inflation rebounds

China dumping US treasuries

BOE minutes may reveal rate hike date

FX Market Overview

Monday and Tuesday slipped by with barely a flicker of excitement but Yay it is Bank of England minutes day. The release of the minutes from the last BOE Monetary Policy Committee meeting will hopefully give some hints on the widely debated date of the first UK interests rate hike. Everyone has an opinion and clearly the members of the MPC aren't in sublime unanimity so the Pound is likely to be twitchy around 08.30GMT. Sterling is in a strong position after public sector borrowing fell again. That will be music to the Chancellor's ears but it does give support to those who question the sharp Whitehall spending cuts he is in the midst of arranging.

We did get some data overnight; Australian inflation data to be precise. That showed a rise fuelled by...well...fuel as it turns out but the rise to 0.7% wasn't has sizable as many had forecast and the effect was also offset by another fall in gold and commodity prices; the continuation of a worrying trend. This weakness in the value of the commodities that Australia exports is weakening the Australian dollar as well but that weakness paused overnight s traders assessed the impact of the inflation data.

Tonight's big news item also comes from Australasia. The Reserve Bank of New Zealand is very likely to cut their base rate by another 0.25% when they meet late this evening UK time. The New Zealand Dollar which, as you are probably aware, is weaker than it has been since 2009, could well lose more ground but this interest rate cut is so widely expected that the effect is likely to be more muted than normal.

The US Dollar has lost some ground after news emerged that China has sold $107 billion worth of US treasury certificates and has switched some of that money into 600 tonnes of gold. This is an interesting development and it may be that China is being forced to liquidate some reserves as funds are flowing out of China at an ever-increasing pace. They still have some $1.3 trillion of US treasuries but we don't know what their plans are for the future. There are many nervous bond traders around. The impact on the US Dollar isn't disastrous but the Dollar has lost a cent overnight.

That's about it for the markets but, in other news, the controversial 'Walkie Talkie' building in London is hitting the headlines again. The concave side of the building was accused of focussing sunlight and burning a car parked in front of the building but 20 Fenchurch Street to give it its proper address is now being accused of channelling the wind around the building to the point where street signs and pedestrians are being knocked over. Its name has been changed from 'walkie talkie', to 'walkie scorchy' but now it is probably 'scorchy blowy' or something equally innovative. I am kind of sorry I wrote about that story now; it's not exciting at all is it.