Daily Market News 19 May 2011

Yesterday’s Market Movers

  • There were two main pieces of data released in the UK yesterday firstly coming from BoE minutes were we saw an unchanged vote 6-3. Being six that don’t won’t a rate hike and three that do, this did little to give a real clear insight in to the BoE monetary policy in the short term as Wednesday’s jump in CPI to 4.45% came after the BoE met on rates last month and wouldn’t of affected the MPC voting.
  • Secondly was the UK unemployment rate which fell 0.1% to 7.7% which saw sterling jump around half a cent against the US dollar and trade as high as 1.6248 in mid morning trade in London, whilst we saw an increase in the claims count slowly offsetting any gains that had occurred on the unemployment rate and saw sterling/dollar trade back down to 1.6135.
  • There was very little data from the euro zone on Wednesday to affect the euro, however with the state of Greece’s debt and a possible second bailout pending and a further aid for Portugal we would possibly see the euro trade lower which in turn would see sterling/dollar dragged down with it.  
  • The only piece of data from the United States was in the form of the FOMC minutes and as expected the Fed maintained QE program and will look at early 2012 as the earliest to will move on rates. The FOMC minutes don’t really give the greenback much support, Fed policy makers have left on hold a rate range of 0 to 0.25%since December 2008.

Today’s Market Movers

  • In the UK today we have retail sales released at 9:30 for April, these are both looking to come in slightly higher than the month prior both on the MoM and YoY. Retail sales are seen as a large slice of consumer spending, have an impact on sterling and given that there was a royal wedding last month and a large influx of overseas tourist this might have added to these better numbers.
  • The main data from the euro zone today comes in the form of the Spanish bond auction of 10 and 30 year bonds. If well received and demand is solid we could see the euro again against the greenback. This would go a long way to show that demand for Spanish debt is sort after within the euro zone after recent possible bail out talks were being spoke about over the last few months.
  • Data from the United States today comes in the form of initial jobless claims, where we are looking for a slight drop in claims which could see the greenback gain against its counterparts if a lower number is seen.