Today’s Rates

GBP>EUR – 1.1626

GBP>USD – 1.3061

EUR>USD – 1.1232

GBP>CAD – 1.7469

GBP>AUD – 1.8388

GBP>SEK – 12.135

GBP>AED – 4.7955

GBP>THB – 41.731

GBP>ZAR – 18.460

This Weeks Calendar

·         JPY BoJ’s Governor Kuroda speech

·         EUR ECB Deposit Rate Decision

·         EUR ECB Interest Rate Decision

·         USD Consumer Price Index ex Food & Energy (MoM) (Mar)

·         USD Consumer Price Index ex Food & Energy (YoY) (Mar)

·         EUR ECB Monetary Policy Statement and Press Conference 

·         EUR European Council Meeting

·         CNY Consumer Price Index (YoY) (Mar)

·         GER Harmonized Index of Consumer Prices (YoY) (Mar)

·         GBP Brexit Deadline

·         USD Michigan Consumer Sentiment Index (Apr)

 

Today’s Overview

  • The week Ahead Euro & GBP in focus as EU leaders hold emergency Brexit Summit
  • EUR>USD Testing daily highs ahead of Sentix
  • UK Inter-party Brexit talks to continue
  • USA CPI and FED minutes in focus this week

 Markets

 GBP

Sterling has seen moderate firmness, recouping some of the declines seen over the last couple of days last week. Cable lifted back above 1.3050 to put in some distance from Friday’s 10-day low at 1.2987. UK Prime Minister May is expected to hold further meetings with Labour’s Corbyn today amid ongoing efforts to find a cross-party compromise on Brexit. The potential compromise that May and Corbyn appear to be working on is the former’s Withdrawal Agreement plus a guarantee the UK would remain in the EU’s customs union in the future, which would both satisfy Labour demands while obviating the need for an Irish backstop. The situation remains fluid. If the talks succeed, then the UK would be set to leave on May 22, ahead of European Parliament elections on May 23. If the talks fail, PM May has committed to putting in a series of Brexit options to Parliament. If these options fail to produce a consensus, and one which would satisfy EU criteria for agreeing on a further delay, then a referendum or general election may be the only viable ways forward. PM May is due to appear at the EU’s emergency Brexit summit on Wednesday with, as things stand, the UK due to exit the EU on Friday, April 12, at 23:00 London time.

 World

Narrow ranges have been prevailing so far among the main dollar pairings and associated crosses. Modest Yen strength was the main directional theme, with the Japanese currency rotating between 0.2% and 0.3% higher concurrently with a turn lower in Asian stock markets. This drove USD-JPY and AUD-JPY to respective six-day lows at 111.35 and 78.96 and EUR-JPY to a five-day low at 124.98. EUR-USD, meanwhile, has plied a less-than-20-pip range in the lower 1.1200s, consolidating above the 1.1210 seen in the wake of the U.S. jobs report, which revealed a blend of strong payrolls and tepid earnings growth, which supported Wall Street but pressured Treasury yields, which in turn kept a lid on the Dollar. In Asia, stock markets started strongly, buoyed by the U.S. jobs report along with hints for more Chinese stimulus. This saw the MSCI Asia-Pacific (ex-Japan) index carve out a fresh seven-month high, though markets subsequently turned lower as circulating analyst notes switched attention to the upcoming corporate earnings season. Some major U.S. banks will be among the first bellwethers to show-and-tell this week amid what is expected to be the first quarter of contracting corporate earnings since 2016.

Source: XE Market Analysis Europe: Apr 08, 2019

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