The Pound Is Rising
Good morning and welcome to the last newsletter of another exciting week on the markets, which has seen more surprise interest rate hikes, improving UK data and lots of talks between Greece and the Eurozone.
Starting off with Greece, the markets are starting to be a little less concerned about a Grexit after this weeks tour by Greek ministers. Currently in discussions with the IMF regarding a plan to swap its sovereign debt for growth linked bonds, Greek Finance Minister Yanis Varoufakis has “agreed to disagree” with German Finance Minister Wolfgang Schaeuble after their talks but with a caveat that they had a moral duty to find solutions.
This week’s chosen one in the currency markets has been the Pound. As expected, yesterday’s interest rate decision by the Bank of England was a non-event and instead the markets were boosted by more surprisingly positive data out of these fair shores. We had extremely positive (unless you are buying a property) house price data from last month showing a 2% increase. This is on the back of positive PMI data and has seen GBPUSD rise to a 1 month high after 4 days of positivity.
The US is not faring so well at the moment and after some worse than expected jobs data and larger than expected trade balance, all eyes turn to today’s non farm payrolls data. The USD rose by 13% last year as the goods trade deficit rose by 5%. We have seen extremely strong labour growth in the US for the past few months but the markets are filled with trepidation about today’s figures considering the recent figures we have seen.
In other news, we also saw an interest rate cut in Denmark to 0.75%.
Other than the NFP data, we have trade balance reports from France and the UK and employment data from Canada.
Have a good weekend!