Previous Day's Market Highlights
The pound softened despite a drop in the Unemployment Rate to 4.2%, the lowest since 1975, as wage figures were mixed. Average Earnings excluding bonuses rose to 2.8%, in line with forecasts, but held steady when including bonuses. Sterling-dollar reversed a new post-referendum high around 1.4375, which it hit prior to the morning’s UK data, and later slipped back below 1.43. Nevertheless, cable is still at some of its highest levels since the referendum.
A greater-than-expected decline in Economic Sentiment put pressure on the euro, and this saw sterling-euro again test (but fail to break) the 1.16 level. It last traded above 1.16 on 24 May, 2017. Euro-dollar reversed an early-morning break above 1.24 to edge down towards 1.2340.
US housing data, including Building Permits and Housing Starts, both surprised to the upside but had little immediate market impact, although the positive figures may have broadly supported the afternoon’s dollar strength.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
Inflation is in focus this morning. First, the UK releases its March figures (09:30 BST). CPIis forecast to have held steady at 2.7% and core inflation to have risen to 2.5%, which will likely maintain expectations that the BoE will raise interest rates this year, perhaps as soon as May. This could be positive for the pound, although the greater risk may be to the downside and a sub-forecast release could weigh on the pound as lower inflation reduces pressure on the BoE to raise interest rates.
Shortly thereafter, the Eurozone releases final estimates of its own March CPI figures (10:00), with no revisions forecast for either headline or core inflation. Initial estimates found headline inflation at 1.4% and core inflation at 1.0%, respectively. The release may have limited impact on the euro barring any significant revisions.
This afternoon, the Bank of Canada is widely expected to keep interest rates on hold at 1.25% (15:00). However, the Canadian dollar could strengthen if the BoC strikes a relatively upbeat tone on the economy and is hawkish on future hikes given recent stronger inflation and labour market data, although NAFTA and trade will likely remain concerns.
Today's Economic Calendar
|09:30||GBP||CPI YoY (Mar)||2.7%||2.7%|
|09:30||GBP||Core CPI YoY (Mar)||2.5%||2.4%|
|10:00||EUR||CPI YoY (Mar)||1.4%||1.4%|
|10:00||EUR||Core CPI YoY (Mar)||1.0%||1.0%|
|13:30||USD||Fed's Dudley Speaks|
|15:00||CAD||BoC Interest Rate Decision||1.25%||1.25%|
|15:00||CAD||BoC Rate Statement|
|15:00||CAD||BoC Monetary Policy Report|
|15:30||USD||EIA Crude Oil Inventories||-1.900M||3.306M|
|16:15||CAD||BoC Press Conference|
|20:15||USD||Fed's Dudley Speaks|
|21:15||USD||Fed's Quarles Speaks|
|23:45||NZD||CPI YoY (Q1)||1.1%||1.6%|
|23:45||NZD||CPI QoQ (Q1)||0.5%||0.1%|
|02:30||AUD||Unemployment Rate s.a. (Mar) 5||5.5%||5.6%|
|02:30||AUD||Employment Change s.a. (Mar)||31.5K||17.5K|