30th May 2017 Market Update
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?? GBP – Sterling was weakened last week due to two main reasons. The GDP second estimate came in lower than expected, much to the market’s surprise. The latest polls also showed a decline in Theresa May’s lead, which contributed to the pound weakening.
The pound looks set for another miserable week with very little data. Thursday will see manufacturing PMI released which is expected to fall slightly in May, construction PMI will follow on Friday, although there is no forecasts available for the data.
?? EUR – Angela Merkel helped the euro push to its highest level this year against the dollar, after stating that she feels the euro is undervalued. Mario Draghi reassured investors suggesting the Eurozone’s finances can remain stable, despite concerns over inflation
Consumer confidence is released today and is expected to remain the same. German unemployment figures are released tomorrow but will likely be overlooked, as the focus will be on the Eurozone as a whole, which is expected to show a slight improvement. The CPI release will likely be in the spotlight, this is expected to drop significantly to 1.5% from 1.9%. Manufacturing PMI is expected on Thursday but that is widely predicted to remain the same.
?? USD – US data last week was limited to GDP figures on Friday which impressed and this provided the dollar with support, however gains were limited. The FOMC meeting minutes showed no surprises and showed an interest rate rise at the next meeting was still likely.
There are lots of smaller pieces of data from the US this week, however the main focus will of course be ISM manufacturing on Thursday and the non-farm payrolls on Friday, both of which are expected to come in slightly lower than last month.
30/05/17 – Consumer confidence, no change expected.
01/06/17 – Manufacturing PMI, expected to remain at 57.
01/06/17 – Manufacturing PMI, expected to fall slightly from 57.3 to 56.5.
01/06/17 – ISM manufacturing, a slight fall is expected.
02/06/17 – Non-Farm payrolls, expected to drop from 211k to 183k.
Unemployment rate, expected to remain at 4.4%.
Our View: With the general election just over one week away the pound will likely remain under pressure, oddly it looks like the same story with the dollar and euro, as both currencies look set to have negative data this week. Therefore, it will likely be political announcements or statements that will drive any moves.
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