13th June 2018 Market Update
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?? GBP – Average earnings came in as expected but was down on the previous month – the unemployment rate however stayed at 4.2%. The pound strengthened a little throughout the morning. This largely set the tone for the remainder of the day.
Later on, we saw the House of Commons vote on an amendment to the EU withdrawal bill which was in Theresa May’s favour. This strengthened the pound, which finished higher come close of business.
Today we will see the key inflation indicator (CPI) released which is expected to remain the same, any divergence will no doubt affect future interest rate rises.
?? EUR – Only economic sentiment was released yesterday which was lower than expected but had no impact on the market.
Industrial production will be released this morning and is expected slightly lower than last month whilst the employment change is expected to remain the same; looks like another quiet day for Europe.
?? USD – Other than Donald Trump’s meeting with Kim Jong-Un, the inflation figure for the US came out as expected and the dollar was unaffected, remaining pretty flat throughout the day.
A big day today, PPI is released early in the afternoon which is expected slightly higher. Though this will most likely go unnoticed with the expected Fed interest rate rise this evening. The Fed are expected to raise rates from 1.75% to 2.00%. Normally you’d expect the dollar to strengthen on the back of this, however, the bigger focus will likely be the Fed statement and if they provide any forward guidance on potential future rate rises this year.
09:30am: CPI – Expected to remain at 2.1%
10:00am: Industrial production – expected to drop slightly
10:00am: Employment change – expected to remain at 1.6%
13:30pm: PPI – Expected to remain the same
19:00pm: Fed interest rate decision and statement – markets are anticipating at 0.25% rise and will keep an eye on what is said in the statement
Summary: Yesterday morning we saw the aftermath of the Trump and Kim summit. Although there wasn’t any impact on markets, future trade deals with North Korea will have an effect. Otherwise decent data releases pushed the pound a little higher whilst the dollar remained flat and the euro dropped off slightly.
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