General election campaigning has been suspended after the tragic events in Manchester. The lack of economic and political drivers has further dampened activity, but the major parties are expected to resume activities Friday.
Sterling gained some initial support from the strength in oil prices, but there was further resistance on approach to the 1.3000 level against the Dollar. Oil prices corrected lower later in the US session which curbed UK currency’s support. The Euro tested the 1.1560 mark after a decline in UK bond yields.
Looking ahead, UK’s first reading of GDP figures for quarter one are due ahead of Business Investment and the Index of Services.
The Greenback found itself under noticeable selling pressure during early trading on Thursday after May’s Federal Reserve (Fed) meeting minutes were neatly packaged with a dovish undertone. Despite expectations of a rate hike in June being realised when Federal Reserve officials said it would “soon be appropriate” to raise rates again, the longer-term hiking path remains clouded.
With Fed policymakers more than likely to hold off hiking interest rates further until there is solid evidence that the recent economic deceleration is solely a period of transition, hard economic data from the U.S will come under heavy scrutiny moving forward. The prospect of a third U.S rate increase by the Federal Reserve in 2017 still remains under threat, especially when considering how Trump uncertainty still remains a major theme.
Today we see the US usual weekly jobless claims, goods trade balance and Fed member Brainard’s speech will remain in focus.
German consumer confidence rose to 10.4 in May, up from 10.2 previously, maintaining expectations of firm growth in the economy. Mario Draghi concentrated on risks surrounding financial stability within the Eurozone and remained optimistic that the European Central Bank’s (ECB) unorthodox policies do not pose a risk at this stage. The bank’s report still indicated medium-term concerns over Eurozone economic vulnerability despite optimism surrounding the growth outlook.
ECB Chief Economist Praet was also optimistic surrounding growth conditions whilst playing down inflationary pressures, which suggests further underlying caution over shifting policy. The single currency is the best performer this year, up close to 6.5% versus the Dollar. From its 14-year lows made back in January, we have had a series of higher lows which have driven up the price to levels not seen since November of last year.
Data to Watch:
24hr USD OPEC Meeting.
3:00am NZD Budget Release (Report).
9:30am GBP Gross Domestic Product (QoQ) (YoY) (Q1).
1:30pm USD Initial Jobless Claims (May 19).
Posted in Daily Market News on May 25 2017
GBPThe Pound managed to leave behind the downside pressure coming from the Manchester blasts and apparent effervescence following discussions between the UK and EU over the ‘divorce bill’, which according to EU officials should be around €100 billion.VIEW FULL ARTICLE
Posted in Daily Market News on May 24 2017 by Rob Affleck and the Sales Team