Sterling awaits GDP Data

Today's Highlights

Us rate guidance awaited

Sterling awaits GDP Data

Commodity falls damaging Aud , Nzd and Cad

FX Market Overview

Well done to Chris Froome for putting up with spitting moons and all manner of slander to win the Tour de France twice. Lance Armstrong has a lot to answer for because, now if you do well, everyone assumes there was something bad going on. Ignore it all Chris and enjoy the moment.

Can you believe we are already into the last week of July? Where has this year gone? Answers on a postcard to..... But, as we cruise down the Champs Elise towards the end of the month there are only a few big news stories to concentrate on. China’s slowdown is one, Greece’s ongoing deliberations with Europe is another and the uncertain nature of US growth is a third.

Dealing with the last one first, this week brings the Federal Reserve’s Open Market Committee meeting at which US interest rates will be decided. No change will be forthcoming, you understand but the markets will minutely dissect every phrase and sentence in the searech for teh fabled hint on the timing of the next interest rate hike. Fed Chair, Janet Yellen has already started prepping the markets for interest rate hikes but most think we are looking at the year-end before there is any real prospect of a rise. Either way, Wednesday’s statement and press conference is probably the most important piece of news for the week. We do get US GDP growth data as well and that could possibly show a positive number which would be Dollar positive.

From Europe, apart from the Greek thing, we will get a raft of data from individual member states plus the inflation data for the Eurozone as a whole. That is likely to remain below 1.0% for the year; hence no threat of rate hikes any time soon. The euro remains on the back foot.

Commodity prices are depressed. So would I be if China stopped buying me in bulk but that’s another story. The impact on the Australian, New Zealand and Canadian Dollars as well as the South African Rand is pretty obvious. All are weaker as a result because this diminishes their income from commodity exports. We’ll get a measure of that on Thursday with the release of Australia’s import and - more importantly, their export price data. A fall of 0.8% is likely or maybe slightly worse than that. The Aussie Dollar could well slide further.

We’ll get Canadian GDP data this week which ought to show a very subdued Canadian economy. Again, commodity prices are the culprit along with depressed US demand for Canadian energy products. The Canadian Dollar is on the back foot.

Sterling is strong andthis week’s data could well add to that strength. Housing and mortgage data is expected to be buoyant; as is the consumer confidence index. However, tomorrow brings the Uk economic growth data and that might be a tad weaker than last quarter’s annualised 2.9%. If so, all the rest of this data is kind of redundant. We will watch tomorrow’s data re;lelease with a sort of subdued fervour. It’s a very English thing to do.

And speaking of very English things, the annual village flower and produce show is as much a part of British life as strawberries and cream, as fish and chips and as chicken tikka masala. Villagers toil for a whole season and sometimes more to produce the best cabbages, turnips and cauliflowers. So when the residents of Quedgeley in Gloucestershire were told that Supermarket veg could be entered, they were rightly unhappy. Much tutting could be heard and I believe - although it is not yet confirmed - that someone even spoke about it loudly in the post office. Well I never. That’ll never do will it.