Today’s Briefing

Today’s Rates

GBP>EUR – 1.1602

GBP>USD – 1.3072

EUR>USD – 1.1267

GBP>CAD – 1.7418

GBP>AUD – 1.8282

GBP>SEK – 12.108

GBP>AED – 4.8005

GBP>THB – 41.564

GBP>ZAR – 18.290

Today’s 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

 

Today’s Overview

  • EURO waits for ECB
  • GBP Struggles ahead of UK data & EU Summit
  • UK Manufacturing production rises in Feb (MoM), a big beat
  • UK GDP Rises in Feb (MoM), beats estimates

Markets

 GBP

Cable has held steady near 1.3050. Focus today will fall on the EU emergency Brexit summit, where the UK Prime Minister will be beseeching leaders for a further extension in Brexit. It’s become understood that her hopes for an extension to June 30 will not be granted, while an EU diplomat cited by the Guardian reported that two dates firming as a possibility are December this year or March 2020 — with conditions attached to limit the risk of the UK undermining the bloc. In the event that the EU refuses to grant an extension, which most pundits view as unlikely, this would ratchet up the risk of the UK leaving the EU on Friday without a deal. The UK could still, in this scenario, unilaterally revoke Article 50 to cancel Brexit, which, if the government did, would likely be done with the promise to hold a new referendum on EU membership. The stability of the Pound suggests that financial markets are sanguine to the risk of a no-deal Brexit scenario.

 World

Forex markets have remained directionally unambitious. AUD-USD has been the main exception, with the pairing lifting by about 40 pips to within a whisker of the three-week seen yesterday at 0.7152. The move was sparked by remarks from RBA’s Debelle, who was upbeat about the labour market. Elsewhere, EUR-USD settled in the mid-1.1200s, down from the two-week high seen yesterday at 1.1284. Cable held steady near 1.3050 while USD-JPY hunkered down in a narrow range in the lower 111.0s, above the nine-day low seen yesterday at 110.98. USD-JPY has been downwardly biased since capping out at a four-week high last Friday at 111.82 concurrently with a fresh sputtering in global equity markets as high valuations look increasingly incongruous with slowing global economic growth. Data showing job openings falling to an 11-month low in the U.S. economy played to these concerns, while President Trump threatened to slap tariffs on $11 bin worth of EU goods. The tariff threat is small compared to the U.S. versus China standoff but nevertheless adds weight on the bearish side of the scales. Expectations for a contraction in Q1 corporate earnings in the U.S. are also in the mix. Market participants are also looking to today’s release of U.S. CPI data for March given the Fed’s dovish-turn has been hinged on a benign inflation outlook.

Source: XE Market Analysis Europe: Apr 10, 2019

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