Tag Archives: Financenews

A busy start to Tuesday’s economic calendar, with high impacting data being released across Europe this morning.

Germany kicks off the day with Employment and Gross Domestic Product releases, with the latter being a key indicator as to how the Eurozone’s largest economy is fairing. Markets are expecting a small rise to 0.1% growth, up from last quarters -0.3%.

The European Central Bank are set to announce their inflation reports this morning, with expectations that inflation will remain unchanged at 2.4%. Anything below the 2.4% forecasted will further enhance the possibility of a June 6th rate cut for the ECB.

Looking ahead this week the UK releases its Purchasing Managers Index for Manufacturing, with investors expecting a decline in the manufacturing sector to 48.7 which falls below the growth mark.

For the US the key releases will come on Friday, with Employment and ISM Non-Manufacturing Surveys the main releases at the end of the week.

On the currency front the pound clawed back its losses against the Euro yesterday, creeping back above the yearly average.

As for the pound to dollar rate, the pound has managed to gain some strength. Gaining 200 points on last weeks low.

The start of the week begins with a raft of Euro data.

Today’s EU Business & Consumer Confidence and German CPI data will be closely watched for signs that the eurozone is growing.

German inflation will be of particular interest, especially for the ECB. French Inflation Is due tomorrow. Should inflation come in above the expected levels, we could see some euro strength as this will decrease the odds of an ECB rate cut in July.

There is no UK or US data today, therefore markets will be dictated by today’s euro data.

The key focus this week will be Wednesdays US Fed policy announcement. Markets will be super keen to see what the Feds latest policy update will reveal and the timing of rate cuts.

At the beginning of the year there was a lot of talk on how many rate cuts we would see in 2024, this has now changed dramatically, although Fed Chair ‘Powell’ has insisted that interest rates may be cut in June.

The pound has held onto its late gains against the euro over the weekend sitting at a near two-week high. GBPUSD sits well under its highs at the start of the month but has gained some momentum of late, clawing back 1.5 percent last week.

In terms of data this week, for the UK we have the Consumer Lending on Tuesday, Nationwide house Price Index on Wednesday and PMI (services) figures on Friday.

For the US, key data other than the Fed policy announcement will be Fridays Non-Farm Payrolls. 

Today there is a mixture of key economic releases in the US. Markets will be keen to see what the Unemployment claims numbers comes back in at, as it is expected to come in higher at 215k above forecasts of 212k.

The change in the value of all goods and services produced in the USA is forecasted to grow 2.4 percent in the first quarter of 2024. A higher-than-expected GDP release will show signs of support for the Dollar and the Feds hawkish stance on holding interest rates.

 Although US GDP is expected to ease in the first quarter of this year following two stronger expansions at 4.9% (Q3 2023) and 3.3 (Q4 2023), consumer spending is still gradually increasing in the States.

Markets now expect only one or two rate cuts this year from the Fed. The delay of monetary policy will be closely watched by investors to see how it impacts the US economy.

 The Pound descended last week following dovish comments from Ramsden outlining a June rate cut is on the cards. However, this week Pound Sterling has recouped some of its losses against the Euro and Dollar.

French and German PMI figures came in this morning revealing mixed data, that has seen the euro weaken off against the pound.

Following the eurozone PMI data, the UK’s own flash estimates have shown a decline from last month’s expansion of 50.4 in the services sector.

However, manufacturing PMI data for the UK has revealed that the sector has grown by 1.9 percent supporting the pound up to 54.9.

Later in the day for the US, we have the PMI Manufacturing figures along with the New Home Sales numbers.

The current uncertainty about how quickly the Fed will cut rates means that the US PMI data Is likely to garner more attention. Markets will also shift their attention to this week’s Q1 GDP for the US.

Later this afternoon, two Bank of England policy makers are scheduled to speak, therefore markets will be looking for any clues on interest rate cuts.

Overall, markets remain volatile with the pound dropping off yesterday, following rising expectations that the Bank of England could potentially cut rates ahead of the Federal Reserve.