1st March 2017 Market Update
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🇬🇧 GBP – Yesterday there was very little data of note from the UK. However, today manufacturing PMI is being released, before construction and services PMIs follow in the upcoming two days. This reading is expected to be positive, and could help the pound recover to levels we saw against the euro and dollar last week.
🇪🇺 EUR – Yesterday was very quiet for the euro, with the only thing of note being France’s GDP coming in line with forecasts – this had minimal effect on the markets.
Today German inflation figures and employment data is being released. Inflation may attract more attention than normal, as it is expected to jump from -0.6% to 0.6%. Such a jump could increase speculation that the ECB will be possibly looking to taper their monetary stimulus programme going forward. Manufacturing data is also being released from across Europe today and it is expected to come in line with the previous readings.
🇺🇸 USD – Yesterday the USA’s GDP slightly disappointed the market, however this was still seen as a relatively strong reading and as a result, the dollar only weakened slightly. The dollar also benefited slightly from better than expected consumer confidence.
Overnight the markets focused on Trump’s first address to Congress, which disappointed the market due to the speech being short on substance. The vague rhetoric failed to address in particular what changes to taxes and tariffs there would be. Following the speech the dollar strengthened and the market renewed its focus on the USA’s next interest rate rise.
The ISM’s manufacturing PMI is being released this afternoon and that wraps up the release of today’s manufacturing data.
9.30am – Manufacturing PMI. Expected to show a marginal slowdown in growth.
9.00am – Manufacturing PMI – Expected to come in the same as last month.
9.00am – German Unemployment Report. Expected to remain at 5.9%.
1.00pm – German Inflation. Expected to rise sharply.
1.30pm – Core Personal Expenditure. Expected to rise marginally.
3.00pm – ISM Manufacturing PMI. Expected to show a marginal slowdown.
3.00pm – BoC Interest Rate decision and Rate Statement. Expected to remain at 0.5%.
Our View: Overnight, Trump’s speech to Congress strengthened the dollar, as he failed to provide specifics. However, the dollar strengthening in part could be down to the uncertain months ahead. Article 50 is being triggered this month, and also Dutch and French elections lay ahead, which means there remains a significant amount of risk in the market, particularly for Sterling.
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