- PBOC should use other methods to keep M2 money supply growth at around 13%
BBG reporting.. No further detail at present
BBG reporting.. No further detail at present
Forex trading headlines from the European morning session 18 Sept
The pound had a sharp rally early on sending GBPUSD above 1.6320 from 1.6280 and EURGBP down through 0.7900 to 0.7885 but then we saw a move back to where we started only to see a slow grind higher, albeit with a dip or two, until a recent poll release saw another rally. Expect more of the same
USDCHF and EURCHF saw sharp falls to 0.9365 and 1.2067 after the SNB left rates and cap on hold but we’ve rallied a little since aLbeit unconvincingly so far
USDJPY had a quick run up to 108.88 on stronger Nikkei but has drifted off but yen pairs still look well supported while USDCAD has retreated from the o/n rally to 1.1025 to post 1.0973 so far
Comments being reported from AWP via Bloomberg
The IPSOS-Mori poll for London’s Evening Standard just released has No on 53% and Yes on 47% suggesting a slightly wider gap
Exit polls today though will be the main focus but GBPUSD has rallied to 1.6336 EURGBP down to 0.7884
More poll detail here for those who have suddenly lost the ability to press a search button…
For me the key is the 4% undecided stat.. that’s around 172,000 voters who have yet to decide
And one vote gets the nod
Not good reading at all, though the pound is more tied up in the Scotland vote I feel.
It’s not all bad though as the balance who saw a rise in output over the prior 3 months rose to 15 from 12 but it’s forward looking that is the worry with that export order balance falling below the long running -20 average. Nothing to note on prices though.
“Against a backdrop of acute political uncertainty at home and abroad, exports orders for UK manufacturers are faltering, which is disappointing. However, it’s encouraging that output growth has remained solid and firms expect production to rise strongly in the next quarter.” Said Katja Hall at the CBI
USDCHF currently 0.9381 after the post-SNB dip to 0.9367 from 0.9420
Sellers 0.9400-10 0.9420-30 0.9455-65 0.9480 0.9500
Buyers 0.9340 0.9320-25 0.9300 0.9280-85 0.9240 0.9200-10
EURCHF currently steady at 1.2077 having posted lows of 1.2064
Sellers 1.2100-10 1.2125 1.2135 1.2150 1.2165 1.2185 1.2200
Buyers 1.2060-65 1.2040-50 1.2020 1.2000 (SNB CHF cap)
USDCAD currently 1.0992 having capped at 1.1025 offers/res
Sellers 1.1000 1.1025-35 1.1050 1.1075-85 1.1100 1.1125 1.1140-50
Buyers 1.0975 1.0940-50 1.0925-35 1.0900-10 1.0885 1.0850
NZDUSD currently 0.8123 having failed to hold above 0.8200
Sellers 0.8150 0.8175 0.8200 0.8225 0.8250
Buyers 0.8100 0.8085 0.8065 0.8050
Nothing new here that we haven’t heard before or didn’t know. The SNB are keeping monetary policy as is but they are still primed. As we know from previous experience they prefer to go for shock and awe rather than make a move when everyone is expecting it. Fair play to them as it keeps everyone on their toes.
That’s probably a little on the low side but the reaction in the euro looks uncertain as it filp flops between 1.2880 and 1.2908.
It’s difficult to make a call on this news. Does it mean there’s no demand from the economy, or that banks are suitably financed so they don’t need it?
Given that they are still paying off the LTRO’s it suggests that they have enough finances and don’t necessarily need the extra money.
What we will need to look out for is that there may be some banks that still have problems and are using this to help solve them. We’ll have to wait for that to come out in the stress tests.
Another point, and there will be many more no doubt, is that if there is a low take up it could well speed up the ABS program to come online and bring forward expectations on QE.
Lots in the mix but for now there’s no move in FX.
As Yohay pointed out in the comments (he’s good you know, you should check his site out forexcrunch.com) average shop prices fell 1.2% on the year and was the largest fall since Oct 2001. Falls at the petrol pumps (-5.0%) was the main driver while food store prices fell 0.1%, the first annual fall since Dec 2004. The fall in fuel prices is always welcome, especially when it costs me nearly 90 sheets to fill the car up, but the fall in shop prices suggests that there’s still some lack of confidence that higher prices can be passed on to shoppers in the long term.
That might change however, as the UK looks to be going on a bit of a spending spree and kitting out their houses. The quantity bought in household goods stores rose 12.7% on the year which is the biggest increase since Oct 2001. Furniture stores were the biggest beneficiaries with sales up 23.4% and the largest growth since records started in 1988. When finances are tight people put off spending out on new stuff for their homes, the new sofa can last a bit longer and the dining room table has still got some life in it, but when the money situation brightens then people are more confident and will splash the cash.
The only caveats to that is that we hope that the old credit card hasn’t been pulled out the back of the draw to pay for it and that the high amount of sales haven’t come via big sales with heavy discounting.
We’ll find out if that has happened in due course though.
All in all it was a steady report, and they can often be volatile, so as long as we start to see a steady trend up it’s another tick in the “good” column for the UK economy.
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