Daily Market Report - 12/05/2015

GBP
Yesterday we saw the Bank of England (BoE) hold Interest Rates at 0.5% for another month. Due to the Election this announcement was delayed, we are now into the sixth consecutive year with interest rates being this low. The Rate has cut return on savings but has benefited mortgage borrowers due to lower repayments.

The BoE left the scale of its quantitative easing (QE) stimulus programme unchanged at £375bn. Attention will now turn to the Bank's quarterly inflation report on Wednesday. This will show how the Bank expects the rate of inflation to move over the next few years, they will look into potential clues as to why the interest rates might rise. The Bank has recently warned that consumer price inflation could turn negative at some point over the next few months. The reason behind this is due to the fall in the price of oil since last year and the continuing supermarket price war.

USD
The US Federal Reserve said that labor market conditions had worsened for April. The figure cites indicators such as the unemployment rate, payroll employment and measures 19 dimensions of labor market activity, all of which gave a negative outlook.

We saw the Dollar rise against the Euro yesterday on renewed worries over a Greek exit from the Eurozone. Due to Greece’s long term issues the Dollar is benefiting from this and is on track to see its third straight session of gains against the Euro. The dollar index, which measures the greenback against a basket of six major currencies, was also set to post its third straight session of gains. The dollar stood little changed against other currencies after mixed U.S. jobs data failed to offer much of a buying incentive. 

EUR
The Euro strengthened across the board after Greece made "progress" on its debt obligations, transferring €750m in debt interest to the IMF - a day ahead of a payment deadline.

Greece's finance minister said the country's financial situation is "terribly urgent" and the crisis could come to a head in a couple of weeks. Yanis Varoufakis gave the warning after Eurozone finance ministers met in Brussels to discuss the final €7.2bn tranche of Greece's €240bn EU/IMF bailout. Greece has until the end of June to reach a reform deal with its international creditors as its finances are running so low that it has had to ask public bodies for help.

The crisis has raised the prospect that Greece might default on its debts and leave the Euro. The Eurozone is insisting on a rigorous regime of reforms, including cuts to pensions, in return for the bailout, but Greece's anti-austerity Syriza-led government is resisting the tough terms.

Key Announcements
GBP - 8:30 - Industrial Production (Year on Year) (March) Expected to rise to 0.2% from 0.1%
GBP - 8:30 – Manufacturing Production (Year on Year) (March) Expected to fall to 1.0% from 1.1%
GBP - 14:00 – NIESR GDP Estimate (April) Previous 0.6%

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GBP

Yesterday we saw the Bank of England (BoE) hold Interest Rates at 0.5% for another month. Due to the Election this announcement was delayed, we are now into the sixth consecutive year with interest rates being this low. The Rate has cut return on savings but has benefited mortgage borrowers due to lower repayments.

The BoE left the scale of its quantitative easing (QE) stimulus programme unchanged at £375bn. Attention will now turn to the Bank's quarterly inflation report on Wednesday. This will show how the Bank expects the rate of inflation to move over the next few years, they will look into potential clues as to why the interest rates might rise. The Bank has recently warned that consumer price inflation could turn negative at some point over the next few months. The reason behind this is due to the fall in the price of oil since last year and the continuing supermarket price war.

USD

The US Federal Reserve said that labor market conditions had worsened for April. The figure cites indicators such as the unemployment rate, payroll employment and measures 19 dimensions of labor market activity, all of which gave a negative outlook.

We saw the Dollar rise against the Euro yesterday on renewed worries over a Greek exit from the Eurozone. Due to Greece’s long term issues the Dollar is benefiting from this and is on track to see its third straight session of gains against the Euro. The dollar index, which measures the greenback against a basket of six major currencies, was also set to post its third straight session of gains. The dollar stood little changed against other currencies after mixed U.S. jobs data failed to offer much of a buying incentive. 

EUR

The Euro strengthened across the board after Greece made "progress" on its debt obligations, transferring €750m in debt interest to the IMF - a day ahead of a payment deadline.

Greece's finance minister said the country's financial situation is "terribly urgent" and the crisis could come to a head in a couple of weeks. Yanis Varoufakis gave the warning after Eurozone finance ministers met in Brussels to discuss the final €7.2bn tranche of Greece's €240bn EU/IMF bailout. Greece has until the end of June to reach a reform deal with its international creditors as its finances are running so low that it has had to ask public bodies for help.

The crisis has raised the prospect that Greece might default on its debts and leave the Euro. The Eurozone is insisting on a rigorous regime of reforms, including cuts to pensions, in return for the bailout, but Greece's anti-austerity Syriza-led government is resisting the tough terms.

Key Announcements


GBP - 8:30 - Industrial Production (Year on Year) (March) Expected to rise to 0.2% from 0.1%

GBP - 8:30 – Manufacturing Production (Year on Year) (March) Expected to fall to 1.0% from 1.1%

GBP - 14:00 – NIESR GDP Estimate (April) Previous 0.6%