3rd September 2018 Market Update
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?? GBP – There was little in the way of data for the Pound last week and it looked as though it could continue dropping. Michel Barnier conceded that there will need to be an unprecedented deal made between the EU and UK. The Pound had its best two day gains in over 7 months, the higher likelihood of a Brexit deal is the main driver.
Over the weekend it was announced that David Davis, the former Brexit secretary confirmed he would join a group of Tory backbenchers opposing the “chequers deal”.
Following its gains late last week the Pound has dropped off a little this morning, manufacturing PMI is expected to fall slightly today but such a small change wouldn’t be expected to move the Pound significantly. The inflation report hearings released tomorrow could be key but that remains to be seen. Construction and services data are expected on Tuesday and Wednesday respectively. News for the Pound is sparse for the rest of the week so again attentions turn to any Brexit related news.
?? EUR – There was very little in the way of data for the Eurozone last week, CPI released on Friday was slightly lower than expected, with the aforementioned Brexit news this was largely overlooked.
Manufacturing PMI today is expected to remain the same. Tomorrow retail sales are expected higher than last time and services PMI is also expected to remain the same. GDP will be the key news on Friday, also expected to remain at the same level.
?? USD – There was very little released early last week but GDP was higher than expected which would usually trigger a positive move for the Dollar but it somewhat lost ground against the Pound and Euro. Initial jobless claims were also out on Wednesday which were slightly better than expected but had little impact on the currency. There was no more significant news for the rest of the week.
Manufacturing data is due tomorrow and is expected higher than last time. Services PMI and composite PMI are due Wednesday and Thursday respectively but markets will have a keen eye on Friday’s non-farm payrolls and unemployment rate. Non-farm are expected slightly higher whilst the unemployment rate is expected to remain the same.
03/09/18: Manufacturing PMI – expected to fall slightly
04/09/18: Construction PMI – expected to fall slightly
04/09/18: Inflation report hearings
05/09/18: Services PMI – expected to improve
03/09/18: Manufacturing PMI – expected to remain the same
05/09/18: Retail sales – expected to improve slightly
04/09/18: Manufacturing PMI – expected to remain the same
Summary: At the start of last week, it looked like the Pound would continue to fall, but following Michel Barnier’s comment the Pound actually started to strengthen come the end of the week. Early indicators also suggested another week of Dollar strength following decent data releases but this was not to be.
This week looks heavily news dependent with most data expected to remain flat and Brexit news will likely have a bigger impact.
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