US raises tariffs, talks extended
Bank of England (BoE) member Saunders stated that interest rate increases would not be far or fast and that the neutral interest rate would be around 2.0%. This was in line with what the Monetary Policy Committee stated but only had a slight effect on the market. Labour leader Jeremy Corbyn announced that the government had made no big offer on Brexit talks and the Pound suffered as a result. A widespread risk averse feeling also hampered the pound over the global trade and growth outlook.
UK GDP numbers, industrial production and manufacturing production dominate the data landscape, whilst total business investment, index of services, trade balance and goods trade balance also play a part. No significant surprises are expected so volatility should remain low.
Jobless claims declined in the latest week whilst producer prices increased for April. These came in marginally below consensus and had very little impact on interest rate expectations. The Dollar struggled to gain momentum whilst trade talks with China dominating the news. The talks have been extended to Friday, however, the US has decided to raise tariffs meaning the probability of a breakthrough has fallen. Trade tensions have continued to affect Friday’s trading session.
The US sees CPI numbers excluding food and energy for April (both month-on-month and year-on-year) which will probably create some volatility. It is followed by the monthly budget statement and the Fed’s Bostic speech.
Yesterday saw very little in the way of data and very little seemed to affect the single currency. Commodity currencies attempted a rally but otherwise, the Euro dipped slightly lower versus the Pound and the Dollar. Today’s dockett sees slightly more data being released. German imports are swiftly followed by its current account numbers, its trade balance and its export. In France, we see the non-farm payrolls and then the industrial output for March. The European Central Bank’s (ECB) Lautenschlager gives a speech and then the UK releases GDP figures for Q1.
Data to watch
01:30 AUD RBA Monetary Policy Statement
06:00 EUR Trade Balance s.a. (Mar) (Germany)
07:30 EUR ECB’s Launtenschlager speech
08:30 GBP Gross Domestic Product (YoY) (Q1)
08:30 GBP Gross Domestic Product (QoQ) (Q1)
08:30 GBP Manufacturing Production (YoY) (mAR)
08:30 GBP Industrial Production (MoM) (Mar)
08:30 GBP Manufacturing Production (MoM) (Mar)
08:30 GBP Gross Domestic Product (MoM) (Mar)
12:30 USD Fed’s Brainard speech
12:30 USD Consumer Price Index ex Food & Energy (MoM) (Apr)
12:30 USD Consumer Price Index ex Food & Energy (YoY) (Apr)
12:30 USD Consumer Price Index (YoY) (Apr)
12:30 USD Consumer Price Index Core s.a (Apr)
12:30 USD Consumer Price Index (MoM) (Apr)
12:30 CAD Unemployment Rate (Apr)
12:30 CAD Net Change in Employment (Apr)
12:30 CAD Average Hourly Wages (YoY) (Apr)
12:30 CAD Participation Rate (Apr)
13:05 USD Fed’s Bostic speech
14:30 EUR ECB’s Coeure speech
18:00 USD Monthly Budget Statement (Apr)