All quiet again, roll on Thursday

Well I’m feeling a little sorry for myself this morning after having had this wisdom tooth extracted yesterday. I use the word extracted as a rather polite term. I’d expected a degree of specialist surgery, at least a nick in the gum requiring some stitches. But no, all it took was a surprising amount of brute force and the thing popped right out. Looking at the tooth, even my untrained eye could see the reason for it needing to come out, it wasn’t a pretty sight and there is no doubt I am better off without it. I brought it home to show the kids to serve as a reminder of the need for decent oral hygiene.

USD – All reasonably quiet, 10 year yields lower once again which is something of a surprise, US stocks are drifting without any real direction, market really waiting for tomorrows inflation print. Talks on Bidens infrastructure plans seem to have reached a standstill with both sides still quite a way apart. Little in the way of data today, quite likely we’ll have another quiet session.

EUR – EURUSD seems settled into 1.2150-1.2200 range and with little in the way of economic data today I would not be at all surprised to see us stay in this range through the day. Tomorrow is the key of course with ECB rate meeting as well as the US inflation numbers. ECB likely to keep policy unchanged, the market is expecting them to sound dovish although surely we’ll have the ‘things are improving but downside risks remain’ sort of speech. Pace of QE purchases will be the main area of interest after ECB increased the pace back in April.

GBP – BoEs Haldane has been giving GBP a little boost, saying there is a lot of upward pressure on prices and that the stimulus tap may soon need to be turned down. He sees inflation over the 2% target for longer than many expect. Remember Haldane is certainly on the more hawkish side of BoE members but is due to leave later this month. GBPUSD popped higher to 1.4180 this morning while EURGBP traded down to 0.8590 (1.1640). The main topic today is likely to be the UK/EU discussions on the NI protocol. The UK don’t like it but did sign up to it as part of the Brexit deal. We’ll be trying to wriggle out of it but the EU is unlikely to give too much ground.

CAD – BoC rate announcement due later today. No policy changes expected, remember they reduced asset purchases at the last meeting so it is unlikely they will do so again quite so soon, however there is a decent chance they may refer to further reductions in QE in the coming months which should support CAD. However with USDCAD down below 1.2100 and not far from multi-year lows I’d imagine BoC may be cautious with any hawkish comments.

- 15.00 US wholesale inventories

- 15.00 BoC rate announcement

- 23.45 NZ electronic card sales

- 00.01 UK RICS house prices

- 02.00 AUS consumer inflation expectations