EU & UK
A slight reprieve for European and British importers yesterday, as generally better than expected EZ services data and a better than forecast final UK Services PMI print allowed both EURUSD and GBPUSD to reclaim the 1.0500 and 1.2100 handles respectively.
Aided by the US Non-Farm Employment Change missing forecast and US Services data coming in largely as expected. Given that the US services data maintained expansionary territory, in contrast to the EZ and UK, this may be profit taking on stretched EURUSD and GBPUSD positions. All eyes will be focused on the US Non-Farms Payrolls print tomorrow, where a beat could reinstate the recent dollar trend and a miss could allow for further paring.Oil
Oil took a relative battering yesterday as Brent fell nearly 6% from peak to trough, instigated by murmurs that Russia may lift their ban on diesel exports. High interest rates and worries of an economic slowdown leading to demand destruction, all adding to the decline and a welcome retracement heading into the winter after a near 30% increase in price observed over the last few months.
Sunak spoke at his first Conservative Party conference and took aim at his predecessors, suggesting we’ve had 30 years of vested interests standing in the way of change, whilst promoting himself as the agent of change. Dominating the conference was his decision to cancel the northern leg of the HS2 rail project, which was backed by all five of his predecessors, and reallocate funds to national transport links.
Well covered on social media was his plan to raise the legal smoking age and restrict the availability of vapes to children.
Introduce the “Advanced British Standard”, a new single qualification for school-leavers that would help level academic and technical education.
Provide bonuses to new teachers that should help attract a larger workforce to the profession.
Deflecting the tax cut issue, he reiterated that halving inflation is the best tax cut the British public can currently receive. Going on to state his progress on reducing inflation, restoring growth, cutting debt, reducing NHS waiting lists and limiting the number of immigrants crossing the channel.
The latest an election can be called is January 2025, and expected in the autumn next year. 20 points behind Labour in the opinion polls, Sunak and the Conservatives may need every one of those months to recover the ground lost to Labour.
Australia’s trade balance widened as surplus of A$9.64b against a forecast A$8.7b, fuelled by a 4% rise in exports saw AUD as yesterday’s best performing major currency. This is welcome news as exports have been negative over the last few months and suggests signs of economic life from Australia’s largest trading partner, China. One US economist calling the bottom of China woes and upgrading their FY 2023 GDP forecast to 5% from 4.7%.
Today’s Data Docket
The first week of the month and more US Labour data, September’s Unemployment claims released at 1.30pm. And UK Construction data this morning at 9.30AM, expected to print in expansionary territory.
If you would like a PDF of this commentary, please contact us and we'll be in touch.Contact us
Find out how we have helped our clients meet their hedging requirements.
UK average property prices fell in November, expectations met by the Bank of Canada, lower than expected Eurozone retail sales, and what's happening today.
PMI's higher-than-expected, UK has highest food price inflation in G7, and oil prices dip to lowest level in last 5 months.
Military aid to Ukraine from the US could run dry by the end of December, step forward for 'Deep Mind', Google's AI specialist, aims to increase nuclear power usage by over 20 countries, and forecasts for UK house prices to fall.
Gold market reacts to Fed comments, easing of Swiss inflation, EU uncertainty in supplying aid package to Ukraine, and what's happening today.
We discuss the conflicts of interest that have come out of COP28, namely why a petrostate is hosting the climate change event. Other global conflicts are also covered in this months issue, with Djibouti at the pinch point of one of the world's busiest shipping routes.
Easing of French inflation, first day of. the OPEC+ meeting, China increase involvement in Israel-Palestine conflict, and what is happening today.
A focus on Fed's next interest rate decision, the words most 'powerful' passport, recession for Sweden, and food price accusations from the CMA.
In a win for the UK space industry, the CAA looks set to approve Britain’s first vertical spaceport in the Shetlands according to The Telegraph