Previous Day's Market Highlights
Economic growth rose at its slowest pace since Q4 2012 in the first quarter, according to data out Friday. This came as a shock for the pound as investors had anticipated a smaller slowdown, from 0.4% in Q4 to 0.3%, versus the 0.1% recorded. The ONS said the bad weather had only a “generally small” impact. Combined with the previous week’s disappointing data and cautious Carney comments, expectations of May Bank rate hike dropped to below 40%, adding to the pound’s woes. Growth in the US also slowed in the first quarter, but by less than expected.
The pound fell almost 0.7% against the dollar around the release, breaking below 1.38 to an eight-week low. Sterling-euro lost the 1.15 level it had regained only the day before and ended Friday below 1.14. The dollar gave up some ground to the euro, which regained 1.21, but ended the week overall stronger having started it in the 1.22-1.23 band. The commodity currencies were broadly weaker as the US dollar strengthened but regained some ground against the pound on Friday.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
The week starts off with German CPI data (13:00 BST), which may have limited effect unless there are any deviations from forecast. Inflation data remains key for ECB expectations. US PCE data (13:30), the Fed’s preferred inflation measure, will be in focus this afternoon ahead of Wednesday’s policy decision; gains in Personal Consumption Expenditures and signs of rising price pressures could pressure the dollar and add to speculation that the Fed could consider raising interest at a faster pace than it has been projecting.
Overnight, the RBA is expected to keep interest rates on hold. If the overall tone is relatively cautious, the Aussie may come off in overnight trading, whilst any upbeat signals could instead strengthen the Aussie.
Other notable releases this week include preliminary Eurozone GDP, the Fed’s latest interest rate decision, and labour market data from the US, including the NonFarm Payrolls and wage growth figures.
Today's Economic Calendar
|13:00||EUR||German Harmonised Index of Consumer Prices YoY (Apr)||1.5%||1.5%|
|13:30||USD||Personal Consumption Expenditures - Price Index YoY (Mar)||2.0%||1.8%|
|13:30||USD||Core PCE YoY (Mar)||1.9%||1.6%|
|14:45||USD||Chicago Purchasing Managers' Index (Apr)||57.9||57.4|
|15:00||USD||Pending Home Sales MoM (Mar)||0.8%||0.8%|
|23:45||NZD||Building Permits s.a. MoM (Mar)||5.7%|
|05:30||AUD||RBA Interest Rate Decision||1.5%||1.5%|
|05:30||AUD||RBA Rate Statement|