Yesterday’s Market Movers
- The positive German GDP and upbeat IFO Expectations and IFO Business Climate undoubtedly gave the sluggish Euro a big support yesterday. Euro extended recovery from the two month low 1.3970 against the Dollar.
- UK Public Sector Net Borrowing declined to £7.713Bn in April from the £15.646Bn in March. It showed an improvement of the Public Sector spending cut and could be the reason why we saw Sterling gaining position overall. However, this is still higher than the expectation £4.400 Bn and recorded the figure a 17 year high reading for April. Although the government has had a 3.5 Bn tax income increase, it seems that the government is struggling to rein in its expenditure.
- US New Home Sales grew in April to 323k in comparison with the 301 in March, exceeding analysts' estimates of 305k. It increased 7.3% compared to the 8.3% last month, much better than the predicted 1.7%. We saw risk appetite in the afternoon on the back of that. Sterling and Euro against US dollar continued their gaining, hitting day high 1.6208 and 1.4133 respectively.
Today’s Market Movers
- German Gfk Consumer Confidence Survey for June decreases to 5.5 from the previous 5.7. The Euro, which has declined from the 1.41 overnight, lost further against Dollar.
- UK Total Business Investment is due to increase for Quarter 1 according to the market consensus, coming out with the important GDP figure at 930. GDP is positively expected to be 1.8% YoY from 1.5% and 0.5% QoQ from -0.5%. Sterling might be supported massively by the figures if they are out as predicted.
- The US Durable Goods Orders for April are to be released with a decline due to the big jump in March. The negative data could promote risk aversion and add uncertainty for the US economy. Hence, investors might move their money into US dollar account.