19th July 2019
Just briefly – the pound rose yesterday as the Parliament passed measures to prevent the next PM from suspending Parliament to enable him to go ahead with a “no deal” Brexit over Parliamentary opposition (see “prorogue” below). Also EU chief Brexit negotiator Michel Barnier said he was open to an alternative plan for the Irish border, although personally I think that if there were an alternative plan that would be acceptable to all parties, they probably would’ve used that one.
18th July 2019
Very low-volatility day. JPY was up on some risk-aversion as stocks in the US closed lower and stock across Asia were largely down too (TOPIX off 1.9% as I write). US stocks fell as the earnings season there gets under way with some poor results. In particular, CSX Corp, an international freight transportation company, fell 10% on a weak sales forecast.
17th July 2019
Only two notable moves in the market overnight: a stronger dollar and a weaker pound. The dollar moved up thanks to much stronger-than-expected US retail sales. The headline figure was +0.4% mom vs +0.2% expected, while the “control” version – the one that feeds through into the US GDP calculation – rose a very strong 0.7% mom vs +0.3% expected, plus the previous month was revised up.
16th July 2019
NZD was the best performing currency overnight after the New Zealand CPI came in exactly as expected, showing some acceleration in inflation – quite different from what central banks in other countries are worried about. Headline inflation rose to 1.7% yoy from 1.5%. Core inflation – which economists don’t forecast – did as well.
15th July 2019
An odd mixture of “risk on” plus “risk off” this morning – or maybe it’s just everything is up vs USD (except EUR).The big news in the market was the mixed Chinese data overnight. Although the key Q2 GDP report showed growth slowing, as expected (6.2% yoy, down from 6.4% yoy; 6.2% expected).
12th July 2019
A classic “risk on” day as AUD/JPY led the way. Odd, because stock markets aren’t reflecting that so much. The S&P 500 was up only 0.23%, while stocks in Asia are mixed this morning, with no big movers (Tokyo is either down or up, depending on whether you look at TOPIX (-0.19%) or Nikkei (+0.15%), while Australia is -0.29%).
10th July 2019
GBP fell to a new year-to-date low after the BRC sales figures showed a larger-than-expected decline in sales in June. A Bloomberg survey showed economists now expect the UK economy to contract by 0.1% qoq in Q2.
9th July 2019
It was a relatively quiet day yesterday and is likely to be similar today, in between Friday’s nonfarm payrolls and tomorrow’s testimony by Fed Chair Powell.The FX market showed a clear “buy dollar” bias, with the dollar gaining against most currencies in a continued aftershock from Friday’s payroll data.
8th July 2019
Friday’s blowout nonfarm payrolls sent the dollar up overall. The 224k rise in payrolls beat the 160k estimate by far – it was higher than the highest estimate on Bloomberg (220k) and compared with the “whisper” figure ahead of time of 133k, which is probably a better indication of where the market thought the figure would come in.
5th July 2019
Many people are watching the stock market nowadays as the S&P 500 index breaks through to a new record highs. However, the really astonishing action has been in the bond markets. Bond yields have been collapsing around the world.
4th July 2019
A much calmer day yesterday, with few major moves in the market. The big exception was AUD, which gained significantly. I have to admit, I’m stumped to explain this with regards to any change in the fundamental picture. The currency didn’t move that much when the news of a record trade surplus came out yesterday morning Australian time.