GBP Awaits Next GDP Estimate

To round off a busy data week, the GBP will keep an eye on any revisions to Q1 GDP. US Durable Goods and central bank speeches are also in focus.

Previous Day's Market Highlights

Sterling rallied yesterday around an above-forecast Retail Sales print that found that sales rebounded in April from March’s decline. However, sterling failed to maintain those gains. Brexit uncertainty remained a downwards pressure as headlines highlighted reports that the government could seek to extend membership in the customs union with the EU until 2023. BoE Governor Carney said last night that a “disorderly” Brexit could require the Bank to keep interest rates low to support the economy.
 
Trumps’ decision to call off the peace summit with Kim Jong-un increased political uncertainty and, combined with under-forecast housing data, put some downwards pressure on the dollar.
 
The Turkish lira weakened again yesterday after rallying the previous day on a rate hike meant to shore up the currency. Investors have speculated that this hike won’t be sufficient and another will be required to prop up the currency. Turkish interest rates are currently at 16.5%. The lira has fallen more than 22% against the pound so far this year.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1413 1.1518 1.1302 1.88%
GBP/USD 1.3358 1.3935 1.3305 4.52%
EUR/USD 1.1702 1.2139 1.1675 3.82%
GBP/AUD 1.7664 1.8467 1.7656 4.39%
GBP/NZD 1.9306 1.9755 1.9247 2.57%
GBP/CAD 1.7248 1.7942 1.7122 4.57%

Today's Market Highlights

The UK releases its second estimate of Q1 GDP this morning (09:30 BST). No change is expected, which may see a muted sterling reaction. However, any surprise to the upside could at least temporarily strengthen the pound.
 
The US releases Durable Goods Orders, a decline in which could weigh on the dollar. BoE Governor Carney and Fed Chair Powell are participating on a panel discussion on “The future of central banking” (14:20), which investors will keep any eye on for any monetary policy clues.
 
Monday is a Bank Holiday in the US and the UK.

Today's Economic Calendar

Time Currency Release Consensus Previous
09:30 GBP GDP QoQ (Q1) 0.1% 0.1%
09:30 GBP Total Business Investment YoY (Q1) 2.3% 2.6%
13:00 AUD RBA Assist Gov Bullock Speaks
13:30 USD Durable Goods Orders (Apr) -1.4% 2.6%
13:30 USD Core Durable Goods Orders (Apr) 0.5% 0.0%
14:15 EUR ECB's Coeure Speaks
14:20 USD Fed Chair Powell Speaks
14:20 GBP BoE Governor Carney Speaks
15:00 USD Michigan Consumer Sentiment 98.8 98.8
15:00 USD Existing Home Sales MoM (Apr) 5.57M 5.60M
16:45 USD Fed Member Kaplan Speaks
16:45 USD Fed Member Bostic Speaks
16:45 USD Fed member Evans Speaks
20:20 EUR German Buba President Weidmann Speaks

Caxton