GBP
UK CPI was a pre Brexit reading so quietly ignored by the market even though it came in at +0.5% and higher than the expected +0.4%. The market took more notice of the comment from BoE’s Wood that evidence in the past few days was consistent with slowing prices and activity in the housing market and sold Sterling. The market continued to sell GBPUSD in the afternoon on USD bullish sentiment and comments from the IMF that Brexit would mean lower UK growth by 0.2% for this year and 1.0% next year. We have the release of UK average earnings data this morning and it will be interesting to see how positive they are especially after MPC member Weale saying previously that earnings made the case for not easing policy. Also released today by the BoE is the agent’s report which is the first UK data to be seen after June 24th.
EUR
The Euro actually moved lower yesterday even though it was mainly driven by other currencies strength and negative sentiment from Turkey where the purge by President Erdogan has expanded to now include teachers and college deans. German ZEW economic sentiment was also a factor coming in at -6.8 and much lower than the expected +8.2 as well as being the first reading after Brexit. The European court of Justice yesterday ruled that “bailing in” creditors before a bank gets State aid was legal however not obligatory. This is very important as it gives Italy a chance to bail out its banking system without investor losses. It must be noted that many of the investors/creditors to Italian banks are Italian private individuals and if the EU wants to alienate the Italian public then forcing a bail in is one way of doing it. UK PM May meets German Chancellor Merkel today and the market will be keen to hear how those talks proceed. Thursday is the big day for the Euro with the ECB rate decision and following press conference.
USD
An article in the WSJ was blamed for bullish sentiment as it raised the possibility of a US rate hike in September. The US housing data was slightly higher than expected and the USD was generally bought across the board. Markets are starting to get concerned over another USD rally which could occur with the Fed looking to put rates up and others looking to ease including the BoE, BoJ, RBNZ and possibly RBA.
ROW
Managed to lose ground in the face of diverging interest rate scenarios and a falling oil price. The market also waits for the Bank of Japan next week when it is widely expected to add more stimulus to the market.
Fuente: www.afex.com
Deja tu comentario
Tu comentario será validado antes de su publicación.