The tilt towards June

27 May, 2016

There is a hesitant tone to markets towards the end of the week. The two factors contributing to this are the G7 meeting taking place in Japan and a scheduled speech by FOMC Chair Yellen later today. Both have the potential to shape the outlook for currencies going forward. Overnight, the G7 were pretty downbeat on the prospects for the economy should the UK choose to leave the EU next month. That should not be surprising given the comments heard previously from the US. Still, they don’t vote, so the impact on sterling was pretty minimal, but the overall tone remains positive, despite cable struggling to push above the 1.4770 3rd May high. With regards to Yellen, today’s event is more a Q&A session, so not the traditional format for steering monetary policy expectations, but nevertheless markets will be sensitive given the recent indications from other FOMC members that June is a live meeting.

Ahead of Yellen, we see further detail and revisions for US GDP data. The first quarter fell to the soft side, expanding at the weakest pace for two years. Some upward revisions are anticipated this time around. In contrast, weaker CPI data in Japan failed to have a material impact on the yen overnight, with markets doubtful of the potential for the Japanese authorities to enact further stimulus. We’ve seen stocks rise during the Asia session, with emerging currencies also doing well. The sense of caution on majors is likely to remain until the G7 meeting is out of the way.


Source link  
Markets Look to OPEC

As OPEC began its 2-day meeting in Abu Dhabi on Monday, to align its members to adherence to output reductions, data from S P Platts revealed that Libya and Nigeria pushed OPEC crude...

BoE Lowers UK Growth Forecast

The Bank of England kept rates at their record low on Thursday, following their latest Monetary Policy Committee meeting. However, the BoE cut forecasts...

Beware Profit Takers

On Thursday US durable goods orders were released showing a 6.5% increase, which was the biggest gain in 3 years, resulting in USD clawing back some of its recent losses....


US Inflation Concerns Pressure USD

The Federal Reserve ended its 2-day meeting on Wednesday with, as expected, no change in US interest rates. The Fed commented that US inflation had declined...

No More Easy Money?

On Thursday, the US Commerce Department released GDP (Annualized QoQ) showing a 1.4% annual rate compared to the 1.2% posted in the previous month. This slight increase shows...

Markets listen to Yellen & Draghi

Central Banks are the key drivers of the markets this week as traders focused on comments made from two major central bankers ECB and Fed...


Markets look ahead to US data

Trading in USD was relatively flat on Friday ahead of economic indicators released next week in the US, which will provide...

Bear Territory for Oil?

Oil continued to trade lower on Thursday as traders look ready to test new lows for crude prices with worries persisting over a global glut...

USD Rises as Investor Concerns Abated

Investor concerns, that low US inflation could deter the Federal Reserve from raising interest rates further this year...

  


Share: