US CPI could liven things up before celestial events take over

Good morning

Yesterday was another pretty quiet one as we expected, GBPUSD hung around 1.3500, EURUSD 1.1545, and USDJPY around 159.25.  However there is plenty on offer in the next couple of days to potentially spice things up.  First up is US CPI inflation this afternoon.  After a shoddy nonfarm payroll headline last week it is going to be interesting to see how this release fares.  The last thing the Fed will want is a higher reading after that disappointing employment number.  If the number comes in lower than expected, which I think has to be possible given the oil price was low or much of July, I can see the US dollar weakening again as the market will begin to think a Fed rate rise is further away. 

Still, Feds Collins made it clear she would back a Sept rate rise if needed to temper sticky inflation.  A couple of banks are still looking for upside USD positions, eyeing EUR, CHF and NZD as currencies to short.  NZD came under a bit of pressure overnight after NZ PM Luxon survived a second confidence vote in four months.  November brings the next general election in New Zealand and it is hoped that after this latest confidence vote there will be a more stable government for the next two or three months.

Also on the agenda for today is the solar eclipse that is due to take place from around 6.45pm here in the UK, reaching its peak around 7.15pm.  London will get something like a 90% eclipse which should be enough for temperatures to drop and birds to go eerily quiet for a few minutes, at least that’s my lasting memory of the eclipse back in 1999.  As this one is late in the day it may be necessary to find some higher ground if you want to actually watch the moon cover much of the sun.  Take care if you do look at the sun, the official warnings are very clear that lasting damage to your eyes can occur by looking at the sun, and camera users should also take care as the light from the sun can damage camera and phone lenses if they don’t have appropriate filters.

Also in the sky, tonight brings the peak of the Perseid meteor shower, which if you can be bothered to stay up after midnight promises to bring a host of shooting stars, up to 150 per hour so if you’re into that sort of thing and the skies are clear, find somewhere as dark as you can with minimal light pollution, lie back and stare at the sky.   I’ll likely give it a go, although to be honest I did this a few years ago and was rather disappointed with the results.

If I’m still stargazing a couple of hours later I’ll be awake for the latest Aussie inflation expectations which will be released overnight, a potential market mover particularly in light of the hawkish tone offered by RBA yesterday.  GBPAUD is currently 1.9135, AUDNZD 1.2035 and AUDUSD 0.7055.   Early tomorrow morning we’ll have the latest UK GDP release, expected to come in around 0.4% against 0.6% for the previous quarter.

By the time you get tomorrows report it is quite possible that A level results will have been published so for any readers who know of anyone getting their results Thursday then I hope they achieve the results wanted or required to move on to whatever the stage of life brings. 

Have a great day…

-  13.30 US CPI

-  19.00 US monthly budget statement

-  02.00 AUS consumer inflation expectations

-  07.00 UK GDP, industrial production,