Domestically, a big day lies ahead with the release of UK Q1 GDP data. The market is split on the outlook for growth. The consensus forecast is for the economy to grow by 0.1% on the quarter, but amongst that distribution is a range from -0.3% to +0.4% which shows how uncertain the outlook is. Both markets and the MPC will focus on the non-construction GDP component to get a better feel for underlying economic activity.
Following the GDP data, February Index of Services (MoM-3mth/3mth) and April CBI Trends and Business optimism surveys are released. This is expected to be positive. Sterling has recently capitalised on the ongoing Eurozone machinations and the uncertainty over the Fed’s path and recent run of lacklustre US data and in that context we continue to expect GBP to hold on to its bullish momentum against the EUR. Against the dollar GBP/USD continues to tentatively test the 1.6165 resistance with a failure to break above that in the coming days suggesting the current upward momentum could run out of steam.
Hence US Durable Goods orders and the Fed decision will be closely eyed - USD may come under pressure ahead of the FOMC decision (a given) and more importantly Chairman Bernanke’s subsequent press conference and the announcement of the Fed’s new projections for economic variables and the Fed Funds rate going out to 2014 and beyond.
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Posted in Daily Market News on May 30 2014
Short and sweet, we find ourselves in much the same position as yesterday; The Netherlands’ AAA rating now apparently under threat after the government collapsed due to an inability to agree to austerity measures. GBP/EUR is trading around 1.2255 having tested 1.2270 overnight.VIEW FULL ARTICLE
Posted in Daily Market News on Apr 24 2012 by alex