Today's Highlights

  • Sterling – yet another up day

  • US Dollar buoyed by above-forecast data

  • Watch out for EUR and CAD movement later

 

Current Market Overview

British consumers defied the naysayers and doom-mongers and helped the retail sales data to beat expectations in July. The numbers were down a little on a very healthy June, but well above market forecasts. A 3.3% year on year growth rate in retail sales makes sense when you see the yawning gap between wage growth and inflation. I am sure the newswires can find a negative spin on it but the markets took it as a sign to buy Sterling. The Pound rose above USD 1.21 and is testing EUR1.09.

 

US Dollar remains strong on positive data

However, Thursday afternoon brought a slew of better than expected US data as well and that boosted the already solid USD. One of the most notable pieces of news was the massive boost to US Treasury purchases. The Treasury International Capital (TIC) data needs a lot of explaining, but, in principle, it is a measure of inbound money into the US government bonds market. The forecast was for $4.4 billion of growth. The actual number was $99.05 billion. That’s largely due to what I have been banging on about all week; safe haven flows and safety for investors but it is the largest reading since August 2018. The only negative data in yesterday’s US releases was industrial production, but that is suffering around the globe as demand slips.

 

Dizzying data diary today could mean movement for Euro and Canadian Dollar

Today’s data diary does promise the same sort of fireworks. The Eurozone Trade Surplus is likely to have shrunk from €23 billion in June to something like €16 billion in July. The afternoon is limited to US Building Permits; a decent measure of economic confidence, and the actual consumer sentiment indices from the University of Michigan. We will get Canada’s inbound treasury flows as well. I suspect they may also surprise to the upside, so beware of CAD strength in later trading.

 

A weekend of sport lies ahead

And then it is the weekend. A weekend in which England’s cricketers will have to dig deep if they are not to slip further behind in the Ashes series and in which England’s Rugby Union team stands a very good chance of embarrassing Wales, the grand slam winners in the Six Nations. Excuse me… ahem… “Swing low, sweet chaaaaarioooottt…!”
Whether you are in your office, factory or workplace, or you are chilling at home, have a great Thursday. #FridayFeeling

I went to the boating lake with the cast of Friends once. Most of them didn’t know one end of the oar from the other. But Lisa Kudrow.

My friend lost the front half of his foot in a DIY accident the other week and now I find I can’t stand him. Seems I’m lack-toes intolerant.

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