Market Insight
Daily Analysis: Markets Remain Tentative As Announcements Are Still To Come
Reece Dye
Head of Corporate Clients
Our daily analysis of EUR, GBP and USD.
DAILY ANALYSIS
GBP
- Sterling continues its recent run as it tests the 1.19 level and 1.33 level on the Euro and US Dollar, respectively, this morning.
- GDP QoQ reported yesterday at 0.7% vs 0.6% expected and 0.1% last time out, whilst the YoY figure did report above the expectation of 1.2%, at 1.3% - it was lower than last time out at 1.5%.
- Today, high-impact data is at a premium with analysts now firmly fixated on next week’s EU-UK talks and the outcome of that
- On the agenda will be deals on security, youth mobility and trade, with suggestions that positive talks behind the scenes have been behind some of the recent Sterling strength.
- With the expectation that the UK could achieve a positive deal from the EU talks, a lacklustre deal focused solely on a defence pack could spark a retreat for the Pound.
USD
- A busy end to the week for the Greenback with multiple high-impact data releases to digest.
- Yesterday, saw PPI YoY release in line with expectation at 3.1%, down from 4% last time out. This was followed by Retail Sales MoM that saw a slight uptick to 0.1% versus a 0% expectation and 1.5% at the last reading.
- Fed Chair Jerome Powell spoke later in the day and doubled down on his decision to hold interest rates at last week’s meeting, stating that inflation could be ‘more volatile’ despite the ongoing public pressure he is receiving from President Donald Trump. He did, however, state that ‘the current stance of monetary policy is well positioned to respond in a timely way to potential economic developments’ – potentially paving the way for a cut at the next meeting should the data support.
- Today, all eyes will turn to the Michigan Consumer Sentiment Index at 3pm for further indication of movement.
- GBP/USD continues to trade above 1.33 this morning, with EUR/USD trading around 1.12.
EUR
- The Euro remains in limbo presently ahead of key negotiations with the UK and the US in the coming weeks.
- Yesterday, GDP QoQ reported at 0.3% down from the 0.4% reading that was expected and achieved last time out. YoY, however, remained consistent with the last reading and expectation at 1.2%.
- Later today, the ECB’s Chief Economist Philip Lane will speak with the market, keen to decipher any sentiment around the upcoming announcements.
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