6th April 2017 Market Update
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?? GBP – A strong service sector helped to bolster the pound yesterday and its strength continued throughout the day. The Purchasing Manufacturers Index was the strongest for 3 months, and showed higher demand for UK goods, with the cheaper pound cited as the primary reason for the increase.
?? EUR – The Eurozone also enjoyed strong manufacturing data, with yesterday’s release being the highest for 71 months. There was the strongest inflow of new business since April 2011 and order backlogs also increased at the fastest pace for close to six years. Employment gained at the fastest pace for close to 10 years and overall business optimism increased to a fresh record high which will maintain confidence in the near-term outlook.
?? USD – In focus yesterday was federal committee minutes, where the key topic was how and when the US will reduce their balance sheet which is currently at 4.5 trillion USD. Statements hinted that the Fed may look to reduce this later this year, causing USD to weaken against a basket of currencies.
10:00am – Greece will release their unemployment figures, previously at 23.1%.
1:30pm – Initial and continuing jobless claims will be the only data out from the US. It is expected that less people will be jobless than previous.
Our View: Draghi’s cautious speech this morning could help bolster GBP today, which is already trading higher than where the pair closed yesterday. Investors also continue to be nervous over Trump’s talks with the Chinese President Xi which could help GBP test highs against the dollar today.
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