US PCE prices rose 0.4% for January with an annual rate at 1.9% from 1.6% and close to the Fed’s 2% target, although the core increase was held to 1.7% and unchanged from the previous month. The ISM manufacturing index rose to 57.7 for February from 56.0 in January and this was the highest reading for over two years which maintained confidence in the outlook.
The dollar was still subjected to some profit taking and the Euro rallied back above the 1.0550 level.
Fed Governor Brainard stated that the US economy appeared to be in a transition phase to a more stable growth path and that gradual interest rate increases are likely to be appropriate soon. There were also comments that a shrinking of the balance sheet could start before too long.
Given that Brainard has consistently been one of the most dovish FOMC members and resisted calls for higher rates, the commentary maintained increased expectations of a March rate increase which continued to support the dollar. The trade-weighted index hit a seven-week high and the Euro was below 1.0550 on Thursday.
UK Energy Apart from announcing that there will be no further North Sea drilling licences issued, newly minted Uk Energy Minister Ed Miliband has wasted no time in greenlighting three huge new solar farms in Lincolnshire, Cambridgeshire and Suffolk. Sufficient to power 400,000 homes with an output of 1.4 GW the solar farms will cover […]
Germany The German business climate was slated to rise in July but instead it fell in terms of both current and also future expected business conditions as reflected in the IFO Index made up of manufacturing, services, trade and construction sectors as submitted by 9000 firms. Germans wishing doubtlessly that they could be as strongly […]
British Pound GBP is currently in fashion: with a record number of long positions and currently at the top of the G7 currency performance charts and after a period of being deeply unfashionable GBP is wanted-in a good way. The reasons for this are diverse: first off is the Bank of England’s caution on cutting […]