Morning Report 01.05.2015
Nicholas Ebisch, FX Analyst
Yesterday saw positive Spanish data, and encouraging Eurozone CPI data which shows that the Eurozone may be recovering faster than was previously anticipated, with inflation staying steady at zero and not contracting. The euro gained against its major counterparts yesterday, and may have scope to continue today, as the Eurozone takes a bank holiday. Yesterday’s dollar depreciation was stymied by positive unemployment claims data in the afternoon. Today, we will see Manufacturing PMI from the UK and ISM manufacturing PMI from the states later in the afternoon.
GBP/EUR: Currently trading at 1.3657
The rate fell further yesterday, in light of some better-than-forecast euro data. Spain’s economy grew 0.9% in the first quarter, its fastest growth in seven years, and CPI data showed inflation holding instead of contracting for the first time this year.
With bank holidays in several countries, no euro data is expected today. This morning’s releases include UK Manufacturing PMI, forecast to increase 0.2 to 54.6, and m/m Net Lending to Individuals, also forecast to increase. We may see a slight strengthening of the pound as a result, but otherwise expect the euro to maintain its strength.
GBP/USD: Currently trading at 1.5347
Stronger-than-expected US data saw the greenback halting Sterling’s gain as cable weakened after several days of hitting month or two-month highs. US unemployment claims came in at a 15-year low at 262,000, and Employment Cost Index q/q also performed slightly better than forecast at 0.7%, indicating that wages are starting to pick up. Other US data were mixed, with both Core PCE Price Index m/m and Personal Spending m/m coming in slightly under forecasts.
Today sees the announcement of US and UK manufacturing PMI data, both forecast to increase slightly over last month’s results, as well as m/m UK Net Lending to Individuals. We may see the dollar continue to regain ground against the pound as markets continue to react to yesterday’s data, as well as today’s releases.
EUR/USD: Currently trading at 1.1254
Stronger-than-expected US data saw the greenback vying with a strong euro, resulting in some volatility in yesterday’s rate. US unemployment claims and employment cost data came in better than forecast, as did Spain’s q/q Flash GDP.
With no data out of the eurozone today, US data will be a primary motivator for the pairing, in addition to markets’ continued reactions to this week’s Fed statement and yesterday’s strong euro data. We may see the euro make further gains against the dollar.
GBP/AUD: Currently trading at 1.9422
The Australian dollar is still on the back foot, as we enter the first day of May. Market participants are holding their breath in anticipation of the Australian central bank meeting, which will happen during early morning hours of Tuesday May 5th. The Australian central bank has hinted that they could raise interest rates as soon as their upcoming meeting.
Australia did produce some good data overnight with positive PPI q/q data released early this morning, which strengthened the Aussie slightly. Traders will also look to AUD Building Approvals m/m data on Monday during the UK bank holiday, and trade balance very early Tuesday morning as the last major data points before the Australian central bank meeting.
GBP/NZD: Currently trading at 2.0249
With no data out of the UK or New Zealand yesterday, the markets continued to react to Wednesday’s RBNZ statement. While the kiwi strengthened nearly two cents against the pound throughout yesterday’s session, the rate seems to have self-corrected overnight, erasing those gains.
Today’s data releases include UK Manufacturing PMI (9:30), forecast to increase slightly to 54.6, indicating slightly improved economic health. In addition to this week’s RBNZ statement, UK data will be the primary mover for this pairing until next week’s release of New Zealand’s unemployment data and Global Dairy Trade Price Index. The rate may remain range-bound.
GBP/CAD: Currently trading at 1.8558
We witnessed more volatility yesterday with the loonie advancing momentarily before losing ground. Canadian GDP m/m remained unchanged in February from January.
The key driver for today is UK Manufacturing PMI data in the early session, which is being forecast to increase by 0.2 per cent. This could give the pound a helping hand and push it higher before the weekend. Weaker-than-expected data could do the opposite.
This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.
Subscribe to our morning, weekly or monthly reports here and make sure you never miss an update: https://www.caxtonfx.com/currency-banking/the-caxton-account#Free-currency-reports
Tuesday, 5 May 2015
Volatility likely during election week
Morning Report 05.05.2015
Nicholas Ebisch, FX Analyst
The pound fell across the board on the Friday before election week as the close race is unnerving investors. This week’s polls and run up to the election will very likely catalyse some market volatility during a busy week. Additionally, Australia has cut its benchmark interest rate to 2% from 2.25% in an attempt to boost an economy which is dragging largely due to the end of a very long mining boom. Today, we will see construction PMI figures from the UK, US and Canadian trade balance, and US non-manufacturing PMI
GBP/EUR: Currently trading at 1.3609
Friday’s UK Manufacturing PMI came in much lower than expected, and the pound steadily weakened over the course of the day, with some correction seen in the rate during yesterday’s UK Bank Holiday. Eurozone manufacturing PMI data released yesterday came in better than expected for Italy but worse than expected for Spain.
This morning’s Spanish Unemployment Change came in significantly better than expected at -118.9K versus -64.8K. UK Construction PMI will be released this morning, with EU Economic Forecasts out later this morning. With the possibility of Sterling volatility as a result of election uncertainty, we may see the rate increase.
GBP/USD: Currently trading at 1.5121
Following a 1.72% (nearly two-cent) drop on Friday after disappointing UK manufacturing data, the dollar made further gains in yesterday’s session. Announcements from the US included m/m Factory orders, which came in as forecast at 2.1%, and expectedly dovish comments by Fed member Charles Evans, who reiterated his support for a 2016 rate increase despite optimism about US growth.
Today’s releases include this morning’s announcement of UK Construction PMI data and this afternoon’s US trade balance and ISM Non-Manufacturing PMI. We may see some volatility in the pound as the election comes up this week.
EUR/USD: Currently trading at 1.1107
After weak US data, the euro reached a two-month high against the dollar at the end of the week. Monday’s releases included manufacturing PMI data, which came in worse than expected from Spain but better than expected from Italy, as well as m/m Factory Order, which met forecasts. Last night, Fed member Charles Evans spoke, indicating his continued preference for a 2016 rate increase.
The main releases for today include Spain’s Unemployment Change, which beat forecasts at -118.9K, as well as US trade balance and ISM non-manufacturing PMI, both of which are forecast to come in slightly worse than in the previous release. This may provide room for the euro to continue making gains against the dollar.
GBP/AUD: Currently trading at 1.9210
With the RBA dropping the cash rate to 2.00% this morning, we saw a sharp two-cent gain in favour of the Aussie as investors reacted to this news. However, this advance was short lived as RBA comments stated that further easing is highly unlikely unless the outlook worsens significantly. The gains were also dampened by Australia’s trade deficit falling below expectations, largely due to the dropping prices for iron ore and coal exports.
Today sees the release of UK PMI construction data, forecast to cool off on last month’s reading along with US trade balance today, forecasting the deficit to widen this month. We should therefore see a fairly volatile day.
GBP/NZD: Currently trading at 2.0073
Heading into the weekend, the rate reacted to Friday’s weaker-than-expected UK manufacturing PMI data and last week’s RNBZ statement. With no major data out yesterday, the rate remained in the 2.00-2.01 range.
This morning’s UK Construction PMI data, forecast to decrease slightly, may influence the morning session, while the later session will be shaped by the release of New Zealand’s Global Dairy Trade Price Index and anticipation of unemployment data, with q/q employment change forecast to come in at 0.7% and the unemployment rate expected to decrease slightly. We may see the rate remain range-bound, with room for fluctuations based on New Zealand’s data.
GBP/CAD: Currently trading at 1.8352
On Friday we learnt that UK Manufacturing PMI unexpectedly slowed last month, with the index falling to a seven-month low of 51.9, from 54 in March. The loonie was able to capitalise and went on to bank gains throughout the day.
Today’s focus will be on UK Construction PMI data in the early session, with analysts predicting a slight decline from last month. This along with a positive shift in the Canadian Trade balance should provide the loonie with added support today.
This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.
Subscribe to our morning, weekly or monthly reports here and make sure you never miss an update: https://www.caxtonfx.com/currency-banking/the-caxton-account#Free-currency-reports
Nicholas Ebisch, FX Analyst
The pound fell across the board on the Friday before election week as the close race is unnerving investors. This week’s polls and run up to the election will very likely catalyse some market volatility during a busy week. Additionally, Australia has cut its benchmark interest rate to 2% from 2.25% in an attempt to boost an economy which is dragging largely due to the end of a very long mining boom. Today, we will see construction PMI figures from the UK, US and Canadian trade balance, and US non-manufacturing PMI
GBP/EUR: Currently trading at 1.3609
Friday’s UK Manufacturing PMI came in much lower than expected, and the pound steadily weakened over the course of the day, with some correction seen in the rate during yesterday’s UK Bank Holiday. Eurozone manufacturing PMI data released yesterday came in better than expected for Italy but worse than expected for Spain.
This morning’s Spanish Unemployment Change came in significantly better than expected at -118.9K versus -64.8K. UK Construction PMI will be released this morning, with EU Economic Forecasts out later this morning. With the possibility of Sterling volatility as a result of election uncertainty, we may see the rate increase.
GBP/USD: Currently trading at 1.5121
Following a 1.72% (nearly two-cent) drop on Friday after disappointing UK manufacturing data, the dollar made further gains in yesterday’s session. Announcements from the US included m/m Factory orders, which came in as forecast at 2.1%, and expectedly dovish comments by Fed member Charles Evans, who reiterated his support for a 2016 rate increase despite optimism about US growth.
Today’s releases include this morning’s announcement of UK Construction PMI data and this afternoon’s US trade balance and ISM Non-Manufacturing PMI. We may see some volatility in the pound as the election comes up this week.
EUR/USD: Currently trading at 1.1107
After weak US data, the euro reached a two-month high against the dollar at the end of the week. Monday’s releases included manufacturing PMI data, which came in worse than expected from Spain but better than expected from Italy, as well as m/m Factory Order, which met forecasts. Last night, Fed member Charles Evans spoke, indicating his continued preference for a 2016 rate increase.
The main releases for today include Spain’s Unemployment Change, which beat forecasts at -118.9K, as well as US trade balance and ISM non-manufacturing PMI, both of which are forecast to come in slightly worse than in the previous release. This may provide room for the euro to continue making gains against the dollar.
GBP/AUD: Currently trading at 1.9210
With the RBA dropping the cash rate to 2.00% this morning, we saw a sharp two-cent gain in favour of the Aussie as investors reacted to this news. However, this advance was short lived as RBA comments stated that further easing is highly unlikely unless the outlook worsens significantly. The gains were also dampened by Australia’s trade deficit falling below expectations, largely due to the dropping prices for iron ore and coal exports.
Today sees the release of UK PMI construction data, forecast to cool off on last month’s reading along with US trade balance today, forecasting the deficit to widen this month. We should therefore see a fairly volatile day.
GBP/NZD: Currently trading at 2.0073
Heading into the weekend, the rate reacted to Friday’s weaker-than-expected UK manufacturing PMI data and last week’s RNBZ statement. With no major data out yesterday, the rate remained in the 2.00-2.01 range.
This morning’s UK Construction PMI data, forecast to decrease slightly, may influence the morning session, while the later session will be shaped by the release of New Zealand’s Global Dairy Trade Price Index and anticipation of unemployment data, with q/q employment change forecast to come in at 0.7% and the unemployment rate expected to decrease slightly. We may see the rate remain range-bound, with room for fluctuations based on New Zealand’s data.
GBP/CAD: Currently trading at 1.8352
On Friday we learnt that UK Manufacturing PMI unexpectedly slowed last month, with the index falling to a seven-month low of 51.9, from 54 in March. The loonie was able to capitalise and went on to bank gains throughout the day.
Today’s focus will be on UK Construction PMI data in the early session, with analysts predicting a slight decline from last month. This along with a positive shift in the Canadian Trade balance should provide the loonie with added support today.
This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.
Subscribe to our morning, weekly or monthly reports here and make sure you never miss an update: https://www.caxtonfx.com/currency-banking/the-caxton-account#Free-currency-reports
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