Mad dash for delays

11th April 2019 Off By binary

GBP
The Pound had another day of political tension with reports emerging that Conservative Party MPs were discussing an indicative vote of no confidence in Theresa May’s leadership. Sterling did get a boost from further gains in oil prices and a firm tone in commodities, partly offsetting the Brexit woes. The Pound managed a daily gain on a weaker Dollar, but the advance petered out around 1.3070 whereas the Euro pushed back to near 1.1560 before fading.

The House of Lords approved the legislation blocking a ‘no-deal’ outcome and it should become UK law today. Technical talks between the government and Labour Party continued throughout the day. Theresa May will jet off to Germany and France ahead of Wednesday’s EU Summit in an attempt to gain support for another extension.

The March BRC retail sales report was poor with a late Easter and Brexit being blamed, but Barclaycard data recorded stronger consumer spending. Sterling has edged up this morning on higher oil prices but choppy trading is set to continue amid intense political activity.

USD

It’s been a relatively quiet start to the week for the Dollar as the market looking for clear directions ahead of key events and brewing geopolitical risk.

US February factory orders declined 0.5%, in line with consensus forecasts, but this was the fourth negative reading in the past five months, maintaining an element of caution surrounding the US outlook. Further gains in oil prices boosted confidence in commodity currencies and also curbed potential Dollar demand which pushed the currency index significantly lower with the Euro pushing to highs around 1.1275 before fading slightly.

The US Dollar drifted lower this morning with fresh gains in oil prices triggered further demand for commodity currencies.

EUR

A weaker Dollar saw the Euro rally slightly on Monday, potentially because of Wednesday’s European Central Bank (ECB) meeting and the expected dovish stance already being priced in. Data wise the Euro sentix investor confidence index strengthened very slightly but still proved to be in negative territory for the fourth successive time. This, combined with German trade volumes below consensus, meant that the Euro struggled to gain any real momentum. The country saw a 1.3% annual decline in exports which caused the Euro to peak at 1.1275 before declining slightly against the Dollar.

This morning has seen the news that the US Treasury threaten to impose tariffs on EU exports over Airbus subsidies. Data-wise we see Swiss unemployment rates, Italian retail sales and Spanish three and nine-month letras auction. Only the unemployment rate will be of interest, but May has flown to Germany for her latest round of meetings with EU leaders so we can expect some interest around any statements being made concerning that meeting. Merkel is expected to offer some support for May, whereas Macron is expected to be less sympathetic when she then goes to Paris.    

 

Data to watch:

01:30 AUD Investment Lending for Homes (Feb)
01:30 AUD Home Loans (Feb)
05:45 CHF Unemployment Rates s.a (MoM) (Mar)
22:45 USD Fed’s Clarida speech
23:01 GBP BRC Like-For-Like Retail Sales (YoY) (Mar)
23:50 JPY Machinery Orders (MoM) (Feb)
23:50 JPY Machinery Orders (YoY) (Feb)

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