Daily Market Report 08/06/16

USD

Despite economic data being light in the US, there was significant volatility in the market. The US dollar lost ground against its major peers as investors seem to be digesting the implications of Janet Yellen’s comments on Monday. With a 16 month continuous drop in factory orders (a statistic that has never occurred outside of a US recession), coupled with a poor labour report last Friday, many analysts believe it would be very unlikely to see a rate increase next week. These internal factors, along with external factors such as global uncertainty and the imminent EU referendum, seem to suggest that current monetary policy appropriately reflects current economic conditions.
 

EUR

Eurostat, the statistical office of the European Union, released a seasonally adjusted GDP figure that rose by 0.6% during the first quarter of 2016 compared with the last quarter of 2015. This stronger growth will be a boost for the ECB which has had to defend it's recent monetary stimulus package.

One of the latest tools by the ECB to purcahse corporate bonds as part of the €80bn a month QE package begining tomorrow in a move which Mario Draghi hopes will provide further boost to inflation prospects.

Yesterday Greece signed a major privatisation deal that will fulfill key conditions for the release of further bailout funding. The deal for luxury real estate on the site of the former international airport in Athens was made in a memorandum of understanding between the state privatisation agency and a consortium of Greek, Arab and Chinese companies. This deal was one of the few loose ends needed for creditors to sign off on €7.5bn in bailout money after the approval of fresh austerity measures in recent weeks.
 

GBP

Prime Minister David Cameron hastily arranged a speech yesterday morning possibly because of growing support for the ‘Out Campaign’ as recent polls suggest. In short, he asked the British people to not ‘sit on the sidelines’ and to back his call to vote to remain within the EU. Conversely, the ‘Vote Leave’ campaign argued that the PM was in a state of ‘blind panic’ and, although in the interest of the British public, was unwilling to take part in a live head-to-head debate.

 

Key Announcements

09.30 - GBP - Manufacturing Production m/m expected to stay the same at 0.1%

15:00 - USD – JOLTS Job Openings expected to rise to 5.82M

15.30 - USD - Crude Oil Inventories