26th May 2017 Market Update
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?? GBP – Sterling was rocked yesterday, as the UK’s second GDP estimate surprisingly came in below expectations at 0.2%, weakening the pound.
Sterling also weakened yesterday evening following a YouGov poll being released. This showed the Conservative lead to have shrunk and the election is far from a foregone conclusion. Today will be quiet for the UK, with no data of note being released.
?? EUR – Yesterday was Ascension Day, meaning a lot of European countries, including France and Germany had bank holidays. This meant there was no data from Europe. Despite this, the euro has maintained its momentum and continued to be strong against Sterling and the dollar.
?? USD – Weekly unemployment data was released from the US yesterday, and came in slightly below forecasts. However due to the regular nature of the data this had no market impact.
Today GDP figures are being released from the US along with core durable goods orders. The GDP data is expected to show a pick up in economic growth to 0.9%. However, even if this did not reach expectatìons it might not hinder the dollar. This is due to Fed minutes earlier in the week suggesting an interest rate rise was very likely, even if the economic data doesn’t quite reach expectations.
1.30pm – Core Durable Goods Orders, Prelim GDP q/q
Our View: The latest poll showed a tightening of the Conservative lead in the General Election. This shows how volatile Sterling remains before the 8th June. The euro remains the best performing major currency at the moment, despite an interest rate rise next month in the US being supposedly priced in.
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