Good morning,
Not much going on
Sometimes there is a lot to write about in these updates. Today is not one of them; markets are like church mice so far this week given the paucity of data calendars and the lack of drive to extend positional bias before a long weekend’s break.
As I write this news of explosions at Brussels Airport is hitting the newswires and, so far, having a limited effect on prices. It is easy for one to immediately view such events through a prism of upcoming political risks i.e. the EU referendum but that is hardly helpful given the circumstances.
Central bankers still moving things
With little structured data in the past 24hrs focus has shifted to what policymakers are saying in speeches. Fed members Lockhart and Williams both managed to keep the candle burning for a rate hike in April but given the overt swing in sentiment from the Fed’s March announcement that is little but lip service we think. Also, as much as Fed Chair Yellen deems every meeting of the Fed to be ‘live’ i.e. there is the possibility of rate movements – the meetings that see amended financial and economic projections and an explanatory press conference are always likely to be favoured.
Governor Stevens of the Reserve Bank of Australia spoke this morning with the market taking the mood music as further comfort of the Bank’s recent hawkishness. Traders seized on the comments such as “the economy is adjusting well to volatility in commodities” and took the AUD higher in the Asian session.
UK CPI to nudge higher
In European trade the main focus will be the latest reading of UK inflation. It is strange to think that last month’s inflation rate of 0.3% year on year was the highest reading we have seen for a year but that is the reality of the global inflation picture. Food and non-alcoholic drinks have continued to remain a depressant on prices.
January’s number was the first inflation reading to be positively affected by the December 2014’s declines in oil prices no longer falling within the survey period and similar falls in food prices also no longer being counted so, from a statistical point of view, it is possible that today’s number may see further increases in the rate of price gains.
The number is due at 09.30.
Elsewhere the data calendar is quiet.
Have a great day.