Sterling set to strengthen

A string of stronger than expected data.

The sterling seems set to strengthen. At least against the Euro. That is the message that macro-economic fundamentals are giving us right now: robust Retail Sales figures, higher than expected core inflation, and rapidly reviving housing markets, the latest in a string of stronger than expected data.

There now seems little prospect that the new Bank of England Governor, Mark Carney, will preside over any more quantitative easing or cuts in base rates after he takes the helm in July. Indeed the sterling interest rate futures markets have already started to anticipate rises in rates, with the first 0.5 per cent hike now expected as early as the end of next year.

Short-term interest rates can be an important determinant of exchange rates; especially when the differential between the two rates involved changes rapidly, and one finds it hard to envisage a rise in Euro rates any time soon. Indeed, we are lead to believe that debate continues to rage within the European Central Bank as to whether they should take their deposit rate into negative territory.

I personally do not expect that to happen, principally because of the "locomotive effect" from an American recovery which is gathering pace by the day. The UK also stands to benefit from this effect, but much more so given the absence of the idiosyncratic challenges which face the Eurozone, in the shape of extreme imbalances between regions, ongoing steroidal austerity and the ever present threat of violent social unrest this summer as tragic levels of unemployment drive voters onto the streets.

The UK’s flexible labour market also places us in a much better position to expand. The foreign exchange markets have a knack of moving very rapidly to discount these sorts of changes in prospect for both the economy and interest rates.

If this move in sterling went too far, however, the new Governor may start protesting. He may well see the tightening in monetary conditions that this would imply, as too much, too early for a still nascent recover. However, the foreign exchange markets can move a long way, and very quickly, before he settles into his seat next month.

Bank of England Governor, Mark Carney. Photograph: Getty Images

Chairman of  Saxo Capital Markets Board

An Honours Graduate from Oxford University, Nick Beecroft has over 30 years of international trading experience within the financial industry, including senior Global Markets roles at Standard Chartered Bank, Deutsche Bank and Citibank. Nick was a member of the Bank of England's Foreign Exchange Joint Standing Committee.

More of his work can be found here.

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Manchester united: "A minority of absolute idiots are trying to break us apart"

At the vigil, one man's T-shirt read: "The only thing that's allowed to be separated by colour is the laundry."

A day after one of the worst atrocities in the history of the city, Manchester's people were keen to show the world the resilience of the Mancunian spirit.

Dom's, an Italian restaurant, is in walking distance from Manchester Arena, where 22 people lost their lives to a suicide bomber the night before. On Tuesday, the staff were giving out free coffee, tea and pizza to anyone who needed it. On a table outside, there was a condolences book, and teary passersby left RIP messages to those who perished. Under a bright blue sky, the community seemed more united than ever, the goodwill pouring out of everyone I met. But the general mood was sombre. 

"We need to make space for healing and for building up our community again, and just getting people to feel comfortable in their own city," the Dean of Manchester, Rogers Govendor, told me.

The terrorist has been named as Salman Ramadan Abedi, a 22-year-old Mancunian of Libyan descent. But with a population of 600,000, Manchester is a cosmopolitan hub, and proud of it. Throughout the day I encountered people of all skin shades and religions. On one of the roads off Albert Square, a couple of Orthodox Jewish boys set up a little stand, where people could grab a bottle of water and, if they so desired, hold hands and pray.

On the night of the tragedy, Muslim and Sikh cab drivers turned off the meter and made their way to Manchester Arena to offer free rides to anyone - many of them injured - who trying to escape the mayhem and reach safety. "It's what we do around here," my taxi driver said with a thick Arabic accent.

The dissonance between the increasingly frantic debate on social media and what was discussed on the streets was stark. I spoke, on and off the record, with about two dozen residents, eavesdropped on a number of conversations, and not once did I hear anyone speaking out against the cultural melting pot that Manchester is today. If anything, people were more eager than ever to highlight it. 

"Manchester has always been hugely multicultural, and people always pull together at times of trouble and need," said Andrew Hicklin. "They are not going to change our society and who we are as people. We live free lives."

It was also a day where political divisions were put aside. Theresa May and Jeremy Corbyn agreed to suspend their campaigns. For the next few days there will be no Labour vs Tory, no Brexiteer vs Remainer, at least not in this part of the country. This city has closed ranks and nothing will be allowed to come between that cohesion.

"I don't demonise anyone," said Dennis Bolster, who stopped by to sign the condolences book outside Dom's. "I just know a small minority of absolute idiots, driven by whatever they think they are driven by, are the people who are trying to break us apart."

Later in the day, as people were getting off work, thousands flocked to Albert Square to show their respects to the victims. Members of the Sikh community entered the square carrying "I love MCR" signs. The crowd promptly applauded. A middle-aged man wore a T-shirt which said: "The only thing that's allowed to be separated by colour is the laundry." A moment of silent was observed. It was eerie, at times overwhelmingly sad. But it was also moving and inspiring.

Local poet Tony Walsh brought brief respite from the pain when he recited "This is the Place", his ode to the city and its people. The first verse went:

This is the place In the north-west of England. It’s ace, it’s the best

And the songs that we sing from the stands, from our bands

Set the whole planet shaking.

Our inventions are legends. There’s nowt we can’t make, and so we make brilliant music

We make brilliant bands

We make goals that make souls leap from seats in the stands

On stage, everyday political foes became temporary allies. Labour leader Jeremy Corbyn, home secretary Amber Rudd, Lib Dem leader Tim Farron, Mayor of Greater Manchester Andy Burnham and house speaker John Bercow all brushed shoulders. Their message was clear: "we are Manchester too."

The vigil lasted a little over half an hour. On other occasions, a crowd this size in the centre of Manchester would give authorities reason for concern. But not this time. Everyone was in their best behaviour. Only a few were drinking. 

As Mancunians made their way home, I went over to a family that had been standing not far from me during the vigil. The two children, a boy and a girl, both not older than 10, were clutching their parents' hands the whole time. I asked dad if he will give them a few extra hugs and kisses as he tucks them in tonight. "Oh, absolutely," he said. "Some parents whose children went to the concert last night won't ever get to do that again. It's heartbreaking."

Felipe Araujo is a freelance journalist based in London. He writes about race, culture and sports. He covered the Rio Olympics and Paralympics on the ground for the New Statesman. He tweets @felipethejourno.

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