All quiet ahead of US nonfarm payrolls

Good morning

The Tube strikers got a bit of rain yesterday although they would have enjoyed some sunshine as well which is disappointing.  I don’t think any more strikes are scheduled but that doesn’t mean there won’t be any in the coming weeks or months.

To the markets and it was another day of very little news and very little movement.  GBPUSD ended the London session around 1.3435, EURUSD around 1.1625, while USDJPY remained just a few pips below 160.00.  That put GBPJPY at 215.00.  This morning we are at pretty much the same levels after a quiet overnight session.  Asian equities were generally lower and European markets are opening lower as well despite US markets putting on yet another spectacular performance.  In terms of news, there really is very little to get our teeth into. 

Trump still insists an Iranian deal is not far away, but Iran don’t seem to say the same.  This looks like it could go on a long time and as we know many central banks are looking at possible rate rises to curb inflation.  So far BoE have steered away from that line of thinking, with Bailey observing the lack of rate cuts that had been expected is sort of like tightening, but BoEs Greene has said that the case for a rate rise is strengthening despite soft UK data.

Some hopeful news out of Ukraine where Zelensky has reportedly said they are open to face to face talks with Russia in order to find peace.  Russia have said they have received the proposal but Putin has said he is ready to make a deal with Ukraine, although I presume this hinges on Russia controlling the Donbas region.  Zelensky did add that US attention had been drawn away to Iran and that peace should not wait until US attention is back on Europe.

England cricketers are facing New Zealand in the first Test of a three match series.  England didn’t start well, ending their first innings 140 all out.  However, the conditions suited the bowlers, and England took three New Zealand wickets in the second over and by the close NZ were reduced to 61/6.  If the weather holds out this test match could be over today!

England’s footballers will also face New Zealand this weekend, the first of two friendlies before the World Cup finals.  New Zealand will face Belgium, Egypt and Iran in their group matches.  I had thought Iran were pulling out but it sounds as though they will make the trip to North America, their base will be in Mexico.  I assume the US will approve the team visas.  

Meanwhile the F1 season continues this weekend at Monaco.  Mercedes have been the team to beat so far this season but there are some thinking that Ferrari has a decent chance of winning over a track that is more about cornering than outright top speed. 

Main events next week include US CPI and ECB and BoC rate announcements.  ECB are expected to raise rates 25 bps to 2.25%, while it is likely BoC will keep rates unchanged. 

Before then we have to get through the US nonfarms.  We’ve had a very quiet week in the currency markets so far, although I’m not sure the data this afternoon will have a dramatic impact.  Headline expected around +85k, with the unemployment rate holding around 4.3%.  The stronger the data, the more chance there should be of the Fed considering a rate rise sooner rather than later.  However with Warsh coming in as Fed chair there are doubts as to whether he’d want to see a rate rise at his first meeting. 

Have a great day, and a great weekend as and when it comes…

-  10.00 EU GDP, employment

-  13.30 US nonfarms payrolls

-  13.30 CAD employment

-  14.40 BoEs Dhingra speaks

-  15.00 CAD Ivey PMI

-  16.30 RBNZs Breman speaks

-  19.00 BoEs Bailey speaks