Previous Day's Market Highlights
The Fed kept interest rates on hold last night, as was widely expected, and indicated greater confidence in inflation hitting target. The lack of surprises or indications of a more hawkish view may have disappointed some investors, prompting an initial move lower in the dollar before it recovered to hit new highs against the pound and the euro since January.
Sterling received some good news earlier in the day as Construction PMI surprised to the upside, rebounding back above the 50.0 level consistent with industry expansion. This enable sterling-euro to make gains above 1.13 and sterling-dollar to head towards the mid-1.36-1.37 band. However, the dollar regained the upper hand, breaking back below 1.36 against the pound and moving lower in the 1.19-1.20 band against the euro, its best levels against the single currency since 11 January.
Elsewhere, data showed that the Eurozone economy grew at a slower pace of 0.4% in Q1, in line with market expectations. As the print was expected, there was limited euro movement around the release. ADP Employment Change surprised to the upside but had relatively limited impact on the dollar. More attention will likely be paid to Friday’s jobs report, with the wage growth number of particular interest.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
The UK releases its final PMI of the month, with an increase in the Services index forecast (09:30 BST). Gains could provide the pound additional support this morning as it looks for positives amidst a recent spate of disappointing economic data. In the afternoon, the US releases Non-Manufacturing PMI (15:00), expected to slip to 58.1 but remain well above the 50-mark consistent with industry expansion.
The main Eurozone release is this morning’s preliminary estimate of April inflation(10:00). Headline inflation is expected to remain steady at 1.3%, while core inflation is forecast to have slowed to 0.9% from 1.0%. This could be a downside risk for the euro as the ECB looks for signs that inflation is rising and debates the timing of fully winding down QE.
Today's Economic Calendar
|09:30||GBP||Markit Services PMI (Apr)||53.5||51.7|
|10:00||EUR||Preliminary CPI YoY (Apr)||1.3%||1.3%|
|10:00||EUR||Preliminary Core CPI YoY (Apr)||0.9%||1.0%|
|13:00||EUR||ECB VP Constancio Speaks|
|13:30||USD||Initial Jobless Claims (Apr 20)||225K||209K|
|13:30||USD||Trade Balance (Mar)||$-50.0B||$-57.6B|
|13:30||USD||Nonfarm Productivity (Q1)||-1.5%||0.0%|
|13:30||USD||Unit Labour Costs (Q1)||2.9%||2.5%|
|13:30||EUR||ECB's Coeure Speaks|
|13:30||CAD||International Merchandise Trade (Mar)||$-2.24B||$-2.69B|
|14:45||USD||Markit Services PMI (Apr)||54.4||54.4|
|15:00||USD||ISM Non-Manufacturing PMI (Apr)||58.1||58.8|
|15:00||USD||Factory Orders MoM (Mar)||1.4%||1.2%|
|02:30||AUD||RBA Monetary Policy Statement|