Feb 21 • Morning Roll Call • 3172 Views • 1 Comment on MORNING ROLL CALL

Thin trading on Monday due to Presidents’ Day in the USA, sees sterling rise versus the USD and all its ten major peers, but USD firms versus EUR and other major peers

between-the-lines1Wikipedia describes Presidents’ Day as:

“George Washington’s Birthday is a United States federal holiday celebrated on the third Monday of February in honour of George Washington, the first President of the United States, who was born on February 22, 1732. It can occur on the 15th through the 21st of February inclusive.

“Colloquially, the day is also now widely known as Presidents’ Day and is often an occasion to honor all persons who have served as president, not just George Washington.”

As to whether (or not) the USA population are feeling in celebratory mood, given the current incumbent in the Whitehouse, is a discussion for another day and no doubt there’s been reams of musings, unfavourably comparing Washington with Trump, over the past 24 hours.

Fundamental news was scarce on Monday, but there were some key observations worth reporting. In the UK the company Rightmove published their latest asking prices survey. Annual asking prices have increased by 2.3% and only the seasonally unusual and highly convenient 2% rise in January, prevented the index from going negative for the year. Whilst considered to be a weaker gauge than the UK’s official ONS house price data, the accompanying Rightmove narrative did suggest that UK’s consumers are at their max debt burden and threshold.

Interestingly, in the ultra expensive areas of London, Chelsea and Kensington, asking prices have fallen by 14.6% annually, to an average price of £2.1 million. What do the ultra wealthy know, that the rest of us mortals don’t, causing them to sell up at such discounts? Brexit, causing a sentiment collapse in the banking world is the best guess, as many high level financiers order the removal vans in.

In other European news Germany published some concerning data that (once again) flew under the radar; producer prices increased by 2.4% annually, from 1% previously. Whilst the ECB and Bundesbank may broadcast this as potentially healthy inflation, the rapid rise from 1% to 2.4% in a month, will have alarm bells ringing if this trend continues over the coming months. Underscoring the potential damage that rapidly rising inflation in the single currency bloc could create, the latest Eurozone consumer confidence data for February was published on Monday; the reading missed expectations of -4.9, coming in at -6.2.

European equity markets experienced a mixed day on Monday; the DAX closed up 0.60%, CAC down 0.05% and the UK’s FTSE closed flat on the day. The main Athens exchange closed up 1.01% on the day, as fears of further bailout stresses were once again dampened.

The Dollar Spot Index endured swings on Monday, finally finishing the day circa 0.1% down. USD/JPY rose by circa 0.2% to 113.14 per dollar. Sterling rose versus all its main group of ten peers, GBP/USD ending the day up circa 0.4% to $1.2465.

WTI oil rose by approx. 0.5% on the day, to $53.43 a barrel, last week was apparently the narrowest trading range in over thirteen years, due to rising U.S. drilling activity offsetting the December OPEC production cuts.

Spot gold climbed by circa 0.3% to $1,237 an ounce on the day, after rising for three straight weeks. Spot silver remained above the critical handle of $18 per ounce at 18.04, a rise of circa 0.7% on Monday.

Economic calendar events for February 21st, all times quoted are London (GMT) times

There is a plethora of Markit PMI data published on Tuesday, we’ve selected the most prominent releases as the highlights.

09:00, currency effected EUR. Markit Eurozone Manufacturing PMI (FEB). The expectation is for a modest fall to 55, from the previous reading of 55.2.

09:00, currency effected EUR Markit Eurozone Services PMI (FEB). The forecast is for no change, from the previous reading of 53.7.

09:00, currency effected EUR. Markit Eurozone Composite PMI (FEB). The expectation is for no change on the 54.4 figure previously.

09:30, currency effected GBP. Public Sector Net Borrowing (Pounds) (JAN). With the expectation that the UK’s economy might move into surplus in this latest reading, there is the potential for sterling to rise sharply versus its major peers. The expectation is for a monthly surplus of -£14.5b, from the previous deficit of £6.4b.

14:45, currency effected USD. Markit US Manufacturing PMI (FEB). The anticipation is for a modest rise to 55.2, from the previous reading of 55.

14:45, currency effected USD. Markit US Services PMI (FEB). The prediction is for a modest rise to 55.8, from 55.6 previously.

14:45, currency effected USD. Markit US Composite PMI (FEB). The previous composite reading was 55.8, the prediction is for this figure to remain static.



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