Daily Market Report - 07/05/2015

GBP
As voters head to the polling stations today, latest polls from YouGov suggest both the Conservative and Labour parties are neck-and-neck, tied at 34%. YouGov president Peter Kellner has predicted that the conservatives will win the most seats at 284 against Labour’s 263 seats. A majority victory for either party seems highly unlikely with the likelihood that a coalition will be formed.

With regards to market data, the only piece of note coming out of the UK yesterday was the Services PMI, with the index coming in better than expected at a reading of 59.5 against a 58.5 consensus. With services accounting for over 70% of the country’s GDP, this should have been seen as a boost for the pound, however with the uncertainty of the election, the pound struggled to gain ground. The Bank of England will begin their monetary policy today and it will conclude tomorrow, however the decision will not be announced on Monday due to the election.


USD
The chair of the US Federal Reserve, Janet Yellen, has warned stock market levels present ‘’potential dangers’’ when speaking at an IMF conference yesterday and stated that this is something that the US central bank will be watching closely. ADP figures were released yesterday, showing a change of 169k against a consensus of 200k, which was the lowest reading since February ’14. With Yellen pointing out recently that the job market will continue to improve, this has given analysts a cause for concern. Crude oil stocks released yesterday showed a reduction in crude oil storage for the first time since December 2014, possibly an indication that the oil market is slowly on the road to recovery.

EUR
Sources indicated that the ECB will again discuss haircuts on the collateral of Greek banks after the Eurogroup meeting on the 11th May. Elsewhere, sources also suggested that the ECB are to increase their ELA ceiling for Greek institutions by EUR 2bln to EUR78.9bln as part of its weekly review. Eurozone retail sales were disappointing yesterday, coming in at 1.6% against a 2.4% consensus YoY. The MoM figure also missing the -0.7% consensus, with a reading of -0.8%. German Services PMI was slightly worse than expected, with a marginal difference of 54.0 compared with 54.4 consensus
 
Key Announcements
GBP – Parliamentary Election
USD – 13:30 – Initial Jobless Claims – expected to increase to 280K from 262K
USD – 13:30 - Continuing Jobless Claims – expected to increase to 2.280M from 2.253M

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GBP

As voters head to the polling stations today, latest polls from YouGov suggest both the Conservative and Labour parties are neck-and-neck, tied at 34%. YouGov president Peter Kellner has predicted that the conservatives will win the most seats at 284 against Labour’s 263 seats. A majority victory for either party seems highly unlikely with the likelihood that a coalition will be formed.

With regards to market data, the only piece of note coming out of the UK yesterday was the Services PMI, with the index coming in better than expected at a reading of 59.5 against a 58.5 consensus. With services accounting for over 70% of the country’s GDP, this should have been seen as a boost for the pound, however with the uncertainty of the election, the pound struggled to gain ground. The Bank of England will begin their monetary policy today and it will conclude tomorrow, however the decision will not be announced on Monday due to the election.


USD

The chair of the US Federal Reserve, Janet Yellen, has warned stock market levels present ‘’potential dangers’’ when speaking at an IMF conference yesterday and stated that this is something that the US central bank will be watching closely. ADP figures were released yesterday, showing a change of 169k against a consensus of 200k, which was the lowest reading since February ’14. With Yellen pointing out recently that the job market will continue to improve, this has given analysts a cause for concern. Crude oil stocks released yesterday showed a reduction in crude oil storage for the first time since December 2014, possibly an indication that the oil market is slowly on the road to recovery.

EUR

Sources indicated that the ECB will again discuss haircuts on the collateral of Greek banks after the Eurogroup meeting on the 11th May. Elsewhere, sources also suggested that the ECB are to increase their ELA ceiling for Greek institutions by EUR 2bln to EUR78.9bln as part of its weekly review. Eurozone retail sales were disappointing yesterday, coming in at 1.6% against a 2.4% consensus YoY. The MoM figure also missing the -0.7% consensus, with a reading of -0.8%. German Services PMI was slightly worse than expected, with a marginal difference of 54.0 compared with 54.4 consensus
 
Key Announcements

 

GBP – Parliamentary Election

USD – 13:30 – Initial Jobless Claims – expected to increase to 280K from 262K

USD – 13:30 - Continuing Jobless Claims – expected to increase to 2.280M from 2.253M