PM May Brexit Speech in Focus

Attention today is primarily on PM May's Brexit speech. Canada releases Q4 GDP.

Previous Day's Market Highlights

Dollar strength initially saw euro-dollar hit its lowest levels since 11 January, falling back below 1.22, and sterling-dollar its lowest levels since 12 January as it inched towards 1.37. However, the greenback later reversed course after President Trump announced plans to impose tariffs on steel and aluminium, prompting concerns of a trade war. US equities fell.
 
As for the day’s data, the UK’s Manufacturing PMI fell less than forecast and remained clear of the 50-point mark indicating industry expansion. The Eurozone’s Unemployment Rate held steady at a revised 8.6%. Personal Income rose more than forecast, while Spending slowed in line with expectations. The US’s ISM Manufacturing PMI rose to 60.8 from 58.1, having been forecast to fall.
 
Fed Chair Powell remained bullish during his second day of testimony yesterday, and Fed Member Dudley later said that four hikes this year would still be gradual.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1228 1.1453 1.1210 2.12%
GBP/USD 1.3769 1.4279 1.3711 3.98%
EUR/USD 1.2263 1.2556 1.2154 3.20%
GBP/AUD 1.7741 1.7999 1.7574 2.36%
GBP/NZD 1.8943 1.9456 1.8934 2.68%
GBP/CAD 1.7676 1.7806 1.7371 2.44%

Today's Market Highlights

The main event today is a highly anticipated Brexit speech from Prime Minister May. May could try to strike a conciliatory tone, but Brexit headlines pose a downside risk for the pound. BoE Governor Carney is also set to speak (10:00 GMT), but on money and cryptocurrencies, and therefore his comments may see little market movement today with attention on Brexit.
 
Eurozone Producer Price Index figures are out in the morning (10:00 GMT) but typically have limited impact. Canada has the main data points of the day, with December and Q4 GDP prints out and the Q4 figure projected to show that growth picked up pace (13:30 GMT).
 
The results of Italy’s elections will be in focus heading into Monday's session and could see euro volatility. Later in the week, attention on the euro continues with the latest ECBmonetary policy meeting and updated guidance. On Friday, the US will release February jobs data.

Today's Economic Calendar

Time Currency Release Consensus Previous
GBP PM May Speaks
09:30 GBP Markit Construction PMI (Feb) 50.5 50.2
10:00 GBP BoE Governor Carney Speaks
10:00 EUR Producer Price Index YoY (Jan) 1.6% 2.2%
13:30 CAD GDP MoM (Dec) 0.1% 0.4%
13:30 CAD GDP Annualised QoQ (Q4) 2.0% 1.7%
15:00 USD Michigan Consumer Sentiment Index 99.5 99.9

Caxton