- The European Central Bank were firmly in focus yesterday afternoon. As widely expected the ECB kept their benchmark interest rate on hold at 0.00% and the accompanying statement was unchanged from March: ‘Rates to remain at present levels for extended period, asset purchases to run at €30Bn a month to the end of September 2018 or beyond if necessary’.
- The following press conference with ECB President Draghi is usually where the action really takes place in FX markets, and following a brief strengthening of The Euro, the single currency then weakened off and endured a poor afternoon.
- GBP/EUR pushed back up to the significant 1.1500 handle, having plummeted back down through it following BOE Governor Carney’s comments last week.
- EUR/USD traded down to it’s lowest levels since early January, hitting a day’s low of 1.2098.
- Sources reporting later in the day suggested the ECB policymakers expect a decision on future monetary policy to be announced at the June or July meeting, but that could be delayed to September.
- Data out of the US was mixed yesterday afternoon:
- Core Durable Goods Orders m/m 0.0% (0.5% Exp)
- Unemployment Claims 209K (230K Exp)
- Goods Trade Balance -68.0Bn (-74.8Bn Exp)
- The EU’s Chief Brexit negotiator Barnier once again stated yesterday that the UK could not have frictionless trade outside of the customs union and single market. Adding that Brexit was a lose-lose situation and warned the UK could not receive a special deal on financial services.
- According to representatives from both the US and UK Government, US President Trump will visit the UK to hold bilateral talks with PM May on the 13th July.
- The Bank of Japan kept their benchmark interest rate on hold at -0.10% overnight as expected. Monetary policy was held steady but they did remove the time frame for achieving their 2% inflation target.
- New Zealand Trade Balance -86M (+270M Exp)
- UK Nationwide HPI m/m 0.2% as expected
- Spanish Flash CPI y/y 1.1% (1.2% Exp)
- Spanish Flash GDP q/q 0.7% as expected
- UK GDP headlines this morning at 9.30am. Perhaps a stronger than expected print could get a May rate hike firmly back on the table.
- US GDP is our key print this afternoon, due at 1.30pm.
|Currency Pair||Interbank Rate||% Change on Day|
|Time (GMT)||Region||Data Release||Forecast||Previous|
|09.00||CHF||SNB Chair Jordan Speaks|
|09.30||GBP||Prelim GDP q/q||0.3%||0.4%|
|13.30||USD||Advance GDP q/q||2.0%||2.9%|
|13.30||USD||Employment Cost Index q/q||0.7%||0.6%|
|15.00||GBP||BOE Gov Carney Speaks|
|15.00||USD||Revised UoM Consumer Sentiment||98.0||97.8|