Governor silent on rates

Antipodeans diverge
IATA has announced a new standard for hand baggage, reducing the maximum size of a carry-on bag by 40%. IATA says the change will help passengers. Samsonite shares are higher on the day. In unconnected moves the Australian dollar also strengthened while the NZ version tanked.

The Aussie and the Kiwi were the leader and the laggard overnight. Unexpectedly strong Australian employment statistics showed unemployment ticking down from 6.1% to 6.0% in May as 42k more people found gainful employment, a third of them on a full-time basis. The Australian dollar moved a cent higher on the news and is stronger an the day by almost that much.

Earlier, the Reserve Bank of New Zealand took investors by surprise when it lowered its Official Cash Rate for the first time in four years, cutting it by 25 basis points to 3.25%. The NZ dollar slumped an immediate four cents lower and went on to lose another one and a quarter, putting it -2.5% lower on the day.

Real markets and greater intensity
In his speech at the Mansion House diner yesterday evening Bank of England Governor Mark Carney set out his stall for a new era of individual and corporate responsibility among banks and what he called "real markets". He did not have a word to say about interest rates.

After what many saw as a faux pas at last year's banquet, when he hinted at an imminent rate increase, Mr Carney was careful to stay off the topic of monetary policy. There was a degree of disappointment and sterling drifted lower overnight. Nevertheless it was the second strongest performer over the last 24 hours, firming on average by the equivalent of one US cent and losing out only to the Aussie. 

Although the euro edged higher against the US dollar there was no strong reaction to news that the meeting between the leaders of Greece, Germany and France had, after all, taken place in Brussels. They unanimously agreed that the talks "should be pursued with greater intensity".

US retail sales
Topping today's ecostat bill are the US retail sales data for May. There is concern that consumer spending in the States is not rising as quickly as it must to keep economic growth on track. A strong number is needed today to offset the precious month's zero sales growth. 

This morning China reported annual growth of 10.1% for retail sales, in line with forecast, and the krona inched ahead in response to rebounds in Swedish industrial production and manufacturing orders. The only other figures scheduled for release before lunch are for Spanish house prices, Greek unemployment and South African manufacturing production.

As well as US retail sales this afternoon's list includes US jobless claims, US import and export prices, Canadian capacity utilisation and Canadian new house prices. The NZ purchasing managers' index comes out tonight. Along the way investors will be keeping an eye out for fresh developments in Athens.