30th May 2018 Market Update
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?? GBP – With a lack of data in the UK yesterday, the pound was at the mercy of movements in other currencies. Losing ground to the dollar which benefitted from safe haven inflows and gaining against the ailing euro.
This morning, we see some reversal in fortunes as the UK sees another day with no economic releases.
?? EUR – Interim PM Carlo Cottarelli is due to visit the Italian President today to acknowledge that he is unable to form a government. This paves the way towards snap elections which could be held within the next two months, alternatively we could see renegotiations for a Five Star/League coalition government. To further add to Eurozone woes, Spanish PM Mariano Rajoy will face a vote of no confidence on Friday and preceded by a debate on Thursday on whether Mariano Rajoy should be replaced by the socialist leader Pedro Sanchez.
Today, Eurozone consumer and business climate will be released this morning and expected to show a small decline ahead of German inflation data which should show an increase, which could ease some of the Euro’s recent decline.
?? USD – The dollar benefitted from safe haven inflows yesterday, though we have seen the dollar softer this morning ahead of the jobs figure this afternoon. The ADP employment change is expected to show a smaller increase in jobs and as a precursor to the all-important non-farms jobs figure we may see the jobs data fall on Friday also.
Growth figures will be released this afternoon and the Fed will also release their beige book to provide an overview of the US economy this evening.
10:00am: Consumer Confidence expected unchanged 0.2
10:00am: Business Climate expected at 1.30 from previous 1.35
13:00pm: German CPI expected at 1.8% from previous 1.4%
13:15pm: ADP Employment Change expected at 190k from previous 204k
13:30pm: GDP expected unchanged at 2.3%
19:00pm: Fed’s Beige book
15:00pm: BoC Interest Rate Decision expected unchanged at 1.25%
Summary: Italian political turmoil is still the focus as the possibility for new elections or renegotiations for a coalition government is on the cards, the euro remains pressured as a result.
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