Yesterday’s Market Movers
- The UK failed to continue in the path of positive data from Tuesday, as both industrial production and manufacturing figures came out worse than expected yesterday. This saw GBP fall back into the 1.13 levels against the EUR and for a period of time saw cable slip back down below the 1.63 level. All of this points towards the BOE holding the interest rate as it is for the time being.
- The GDP figure for the EU was a key figure yesterday, coming out flat QoQ, although showing an increase YoY. Whilst this had little immediate effect on the markets, it does point towards the ECB raising interest rates later today which despite being priced into the market somewhat already could strengthen the Euro further.
- There was no key data released in the US yesterday.
Today’s Market Movers
- This morning it was announced that Portugal would be needing a bailout, but as one of the smaller contributors to the EU economy and given that has been a topic of discussion for some time now, little effect was noticed in the market.
- The focus for today is on the BOE and ECB interest rate decisions. With a hike in the Euro zone looking more likely and the consensus being that the BOE will not raise interest rates in the UK today, we could see some Euro strength if the rate is increased and some sterling weakness if the rate is kept flat. However a more drastic movement would be expected to arise should the EU surprisingly not increase interest rates or conversely in the UK if the BOE make a shock decision to increase interest rates today. These are today’s main movers.
- In the US initial jobless claims are expected slightly better than previous which given the recent return to fundamentals in the market we could see the USD strengthen slightly.