Previous Day's Market Highlights
Sterling hit highs against the dollar above 1.42 but lost ground after production figures declined or rose less than forecast and despite trade figures showing a narrower deficit than projected in February. Against the euro, the pound failed to regain the 1.15 handle but continued to hold above 1.14. Euro-dollar was little changed ahead of the Fed minutes but inched lower in the 1.23-1.24 band as the dollar gained on the Fed’s relatively upbeat tone.
The Fed minutes highlighted a strengthening economic outlook and expectations that inflation will hit the central bank’s 2% target rate. Investors will continue to keep an eye out for signs that price pressures are accelerating as they try to determine whether a fourth rate hike could be in the cards. The Fed has been projecting three hikes this year.
Earlier in the afternoon, US CPI figures were mixed as monthly inflation declined, while core and annual inflation firmed. However, the inflation releases were broadly in line with market expectations and had limited impact. Investors eyed rising tensions with Russia over Syria.
Oil prices, including both US WTI and Brent, rose to their highest levels since December 2014 as investors speculated tensions in the Middle East could disrupt production. The Canadian dollar hit its strongest levels against the pound since 12 March at around 1.78.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
Attention today turns to the next batch of monetary policy meeting accounts, this time from the ECB (12:30 BST). Investors will closely parse the comments for clues that the ECB will definitely wind down QE this year, as some speculate it will do in September, and for any indications as to when it will start raising interest rates. Greater market attention may be paid to today’s accounts after Nowotny’s hawkish comments earlier in the week.
There are no major economic releases from the UK today. BoE Governor Carney isspeaking tonight at the Canada Growth Summit (19:00 BST), but the summit may have greater implications for the Canadian dollar unless UK monetary policy is specifically addressed.
The US releases weekly Initial Jobless Claims (13:30 BST), which are forecast to slip back down to 230K but in any cas are expected to remain well below the 300K level consistent with a strengthening labour market. This could see some dollar strength, but the release’s overall market impact will likely be limited with investors’ focus primarily on the latest trade headlines and geopolitical developments. Overall, rates may remain within familiar ranges today given the relatively quiet calendar.
Today's Economic Calendar
|09:30||GBP||BoE Credit Conditions Survey|
|10:00||EUR||Industrial Production s.a. MoM (Feb)||0.1%||-1.0%|
|12:30||EUR||ECB Monetary Policy Meeting Accounts|
|13:15||EUR||ECB's Coeure Speaks|
|13:30||USD||Initial Jobless Claims (6 Apr)||230K||242K|
|13:30||CAD||New Housing Price Index MoM (Feb)||0.1%||0.0%|
|20:00||GBP||BoE Governor Carney Speaks|
|22:00||USD||Fed's Kashkari Speaks|
|03:00||CNY||Trade Balance USD||$27.87B||$33.74B|
|03:00||CNY||Trade Balance CNY||160.00B||224.88B|