Tag Archives: Financenews

This morning, we have Purchasing Managers Index figures in the manufacturing and services sector for France, Germany, United Kingdom and the European Union.

Across the board PMI data is set to show an expansion from their previous releases and it represents as inflation falls, business conditions and new orders improve.

 In the States, the total number of people that have filed for unemployment claims is set to come in at 220k.

 Following the UK CPI inflation release yesterday, Pound Sterling has been on the rise against all the other currencies in the G10, after it surpassed market expectations releasing at 2.3 percent (forecasted 2.1 percent).

 The Bank of England are now expected to delay an anticipated interest rate cut next month. Markets are forecasting three cuts this year from and interest rates to fall from 5.25 percent to 4.5 percent with the first rate cut likely to be in August.

 Pound Sterling has also been supported after Prime Minister Rishi Sunak announced a snap general election on July 04 to vote in a new government. GBPEUR in now trading at its highest level this year.

Sterling has been on the front foot in early trading this morning, following the release of UK CPI inflation data for April. 

Today’s level is the closest it has been to the Bank of England’s target of 2% in three years.

However, the Bank has signalled that interest rates, which have been hiked in recent years to restrain inflation, may be reduced this summer. Rates are currently at 5.25% (the highest in 16 years).

Yesterday, several central bank officials’ remarks were once again the focus of attention. ECB President Christine Lagarde reiterated that a rate drop in June was inevitable. In the United States, Fed Governor Waller stated that the next interest rate policy decision is unlikely to be a rise, but additional evidence that inflation is falling steadily to 2% is required before the Fed may decrease rates. Fed officials Bostic and Mester also stated that more information will be required before the Bank cuts rates.

Looking ahead, the overall calendar remains quiet for the rest of today. On the monetary policy front, the release of the most recent Fed FOMC meeting minutes will get some attention. Remarks from central bank officials will also be scrutinised.

The slow start to the week continues today, with the only major release of economic data being the Canadian Consumer Price Index.

However, later this evening Bank of England Governor Bailey will be holding a speech at 18:00. Investors will be sure to tune into this as the talk of a summer rate cut becomes more of a probability.

Looking ahead this week to Wednesday, the UK release their Consumer Price Index where inflation is expected to take a major drop towards the 2% target. Markets are forecasting a drop to 2.1% (from 3.2%). With the talk of rate cuts in the UK becoming more prominent, markets could see some volatility off the back of this release.

Following this the US will announce their Existing Home Sales, a key indicator in the state of the economy.

As the week goes on, markets are preparing themselves for further volatility with the release of PMIs across Europe.

The final release of note for the UK before the Bank Holiday is Retail Sales, markets are expecting to see a fall in this year on year.

As for the currency market, the pound has gained some strength against both the euro and dollar.

Today is a quiet start to the week with no data for the UK or EU.

We do have several Fed speakers today for the US scheduled to speak this afternoon. The topic of discussion is likely to be centered around interest rates.

Last week was dominated by US data, notably the inflation figures which came in softer than expected boosting expectations that the Fed will cut interest rates sometime this year.

Other US data that came in last week was genuinely weaker than expected.

This week there is a lot of UK data, with the highlight being this week’s inflation report on Wednesday. Markets are expecting to see a fall in the headline inflation number, but it is expected to remain above the 2 percent target,

We also have the PMI data, retail sales and Gfk consumer confidence numbers for the UK.

For the US and EU this week, PMI data will be the key focus.

Lastly, this Wednesday we have the minutes of the last Fed policy announcement that may give us further clues on the US interest rate intentions

The market attitude was modest and cautious yesterday, compared with the previous day’s brighter atmosphere. Given the calm data schedule elsewhere, yesterday’s macro news flow centred on the US economy. 

US Federal Reserve members warned yesterday that, despite this week’s lower-than-expected US inflation report, interest rates may need to remain higher for longer. In contrast, Bank of England policymaker Greene stated that there is evidence that the UK employment market is becoming more balanced, implying that she is leaning towards supporting an interest rate drop.  

Looking ahead, today’s macro schedule is pretty calm as we approach the weekend. Today’s data schedule is quiet, with nothing noteworthy in the UK. In the Eurozone, the April CPI will be a second reading and is unlikely to be significantly different from the previous estimate.

This put annual inflation at 2.4%, unchanged from March and the joint lowest rate of the year. Meanwhile, the core rate dropped to 2.7%, down from 2.9% in March and the lowest level since early 2022.  

In the United States, the only notable release is the April update to the leading index. That statistic is intended to forecast future economic trends, including turning points in economic activity.