5th March 2018 Market Update
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?? GBP – Sterling slipped against the euro and US dollar on Friday after Prime Minister Theresa May urged the European Union to show more flexibility in talks in a future relationship but failed to convince investors a smooth Brexit transition deal is assured. In a week in which Sterling has fallen, the pound was initially unmoved by May’s comments but limped slightly lower against both the single currency and the greenback as the speech came to an end.
The pound has suffered its worst week against the euro since October after comments by the EU’s chief Brexit negotiator, Michel Barnier, on Wednesday that a deal was far from guaranteed thrust political risk back into the centre stage. From the UK today, we have data in the form of PMI services numbers at 9:30am.
?? EUR – The single currency ended last week firmer versus the greenback mainly on the back of a weaker US dollar, with traders holding back on taking any positions ahead of Italy’s parliamentary elections over the weekend. Voting opened at polling stations in Italy yesterday. Although no party won a majority, the anti-establishment 5-Star Movement came out as a clear winner, looking set to become the largest single party by a wide margin. From the Eurozone today, we have data in the form of Italian, French, German and Eurozone PMI’s.
?? USD – The US dollar fell against most currencies on Friday, dropping to its lowest level in more than two years against the Japanese Yen, as President Donald Trump’s proposal to impose hefty tariffs on steel and aluminium imports raised the prospect of a trade war that could prove damaging to the world’s biggest economy. From the United States today we have data in the form of the PMI services and composite numbers added with ISM manufacturing figures.
09:30am: PMI Services 54.5 vs an expected 53.0
09:00am: Eurozone PMI 56.2 vs an expected 56.7
14:45pm: PMI services expected at 54.6 from previous 55.9
15:00pm: ISM Manufacturing expected at 59.0 from previous 59.9
Summary: Sterling loses ground against majors as investors are not convinced that a transition deal is guaranteed.
Donald Trump speaks to world leaders regarding his planned tariff hikes on US goods in the way of steel and aluminium.
Italy awaits outcome on national elections.
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