4th May 2018 Market Update
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?? GBP – Services PMI data fell below expectations from the UK yesterday morning but we saw little Sterling movement off the back of this against both the euro and dollar. Sterling in particular remained in a weaker position against the dollar throughout yesterday, however there was very limited movement against the euro – mainly sticking to a 20-pip range.
Today there is a lack of data from the UK, and Sterling movement will be reliant on data from other countries.
?? EUR – A reduction in the EU’s quantitative easing programme was thrown into doubt yesterday as inflation came in below expectations at 1.2% and Core CPI came in at 0.7%. This was during a period when energy prices have risen and the euro has weakened against the dollar – which in theory should have led to higher levels of inflation.
This morning services data has come out from across Europe slightly below expectations, however this has had no market impact.
?? USD – Yesterday ISM non-manufacturing PMI came in below expectations however the dollar remained at its strongest levels since January against the euro and dollar.
Today is jobs day for the US, and non-farm employment figures are meant to be released at 190k, quite a lot stronger than previously. This could help the dollar continue its recent bull run against Sterling and the euro.
Japanese Bank Holiday
13:30pm: Average Hourly Earnings, Non-Farm Employment Change, Unemployment Rate
Summary: The dollar remains strong across the board despite weaker ISM non-manufacturing PMI being released from the US. Sterling held its ground against the euro though despite worse than expected services PMI. Europe’s CPI came in below expectations, throwing into doubt a tapering of quantitative easing.
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