The Pound was range-bound for most of the day despite the first Tory Leadership ballot. Current favourite Boris Johnson achieved 114 votes, Jeremy Hunt came second with 43 votes. Leadsom, Harper and McVey failed to progress and will bow out. The next ballot takes place on the 18th June, Matt Hancock is considering bowing out too. The next Tory leadership will still be the head of a weak minority government, and have to find a viable Brexit solution with a deeply divided parliament and an uncompromising EU. As such Brexit is in stasis maintaining the depressed Sterling value initiated by the referendum.
Sterling was constrained between 1.1215 and 1.1260 against the Euro, and 1.2670-1.2700 on the Dollar. A lack of UK data today means trading impetus will likely come from Mark Carney’s speech in combination with US jobs data.
The US Dollar attracted some haven flows amid deteriorating risk sentiment on the back of fears of a further escalation in trade tensions between the world's two largest economies and exerted some pressure on the major. The incoming softer US economic data - including last Friday's May monthly jobs report, coupled with slowing inflation raised prospects for at least two rate cuts in 2019. However, the fact that the move is largely priced in, investors seemed inclined to cover their USD bearish positions heading into next week’s FOMC policy meeting.
Later during the early North-American session, the US economic docket – highlighting the release of monthly retail sales data, might further contribute towards producing some meaningful trading opportunities on the last trading day of the week.
German inflation data for May, and Month on Month EuroZone Industrial production printed in line with forecasts, triggering no reaction in the Euro. Again there was little excitement with the Euro opening at 1.1300, and dipping to 1.1275 by the close. With Euro interest rates perceived to held for 12 months the 2 ECB members speeches today are unlikely to generate much volatility and the US data will take precedence.
Data to watch:
07:00 CNY NBS Press Conference
07:00 CNY Industrial Production (YoY) (May)
07:00 CNY Retail Sales (YoY) (May)
10:00 EUR ECB’s Lautenschlager speech
N/A EUR ECB’s De Guindos speech
12:30 USD Retail Sales Control Group (May)
12:30 USD Retail Sales (MoM) (May)
12:30 USD Retail Sales ex Autos (MoM) (May)
12:55 GBP BoE’s Governor Carney speech
13:15 USD Industrial Production (MoM) (May)
14:00 USD Michigan Consumer Sentiment Index (Jun)
Posted in Daily Market News on Jun 14 2019
About the author //
With more than 17 years experience in financial services, Head of Sales Rob guides PLCs and sole traders alike through the complex maze that is the foreign exchange market, helping them to save money and mitigate risk.
He has a wealth of experience and knowledge from holding numerous roles including various positions in investment banking and services in Front, Middle and Back offices. This gives him giving a particularly insightful view on customers’ problems and requirements. Rob also helps to keep our clients informed of the latest in the currency world with our daily market commentary.
GBPSterling initially gained support from a cross-party attempt to pass legislation that would prevent a ‘no-deal’ Brexit and Tory leadership favourite Boris Johnson commented that he was not aiming for a ‘no-deal’ outcome which also helped.VIEW FULL ARTICLE
Posted in Daily Market News on Jun 13 2019 by Rob