28th April 2017 Market Update
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?? GBP – Consumer confidence dips slightly in April as Brits eye rising inflation and rising prices as a worry for their household financial situation. However Theresa May’s dominance in the polls pays off for the pound, which has largely maintained its strength.
?? EUR – Euro weakness was the theme of the day, with the currency closing lower on dollar and Sterling. This is following a dovish statement on the economy from Draghi, after revealing that there are no plans to taper off QE, which is seen to be the next step for the ECB on the road to economic recovery.
Interest rates were also kept at 0%, although there was no discussion of this moving so it was already priced in by the market.
?? USD – Lower than expected durable goods orders pushed USD lower against a basket of currencies. The slowdown in auto demand from consumers and tepid business investment weighed on manufacturers and sapped some economic momentum at the end of the first quarter, however the increase in demand of fighter planes and passenger aircrafts pushed orders higher than previous.
9.30am – Preliminary GDP is expected lower than previous and could cause the pound to drop off.
12:30pm – Preliminary GDP figures are likely to set the tone going into the afternoon. The reading is set to be down on previous.
Our View: Theresa May announcing the snap election in June may have removed any downward pressure on the pound and it could benefit from tax flows as it has historically every April. Though we may see some Sterling retracement this afternoon as markets prepare for the long weekend break.
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