Yesterday’s market movers
- In the UK yesterday the first pieces of economic data to be released were the manufacturing and industrial production figures. Manufacturing showed some positive growth whereas the converse was true for industrial production figures. These seemed to cancel each other out, especially with the main focus on the interest rate decisions from the BoE and the ECB later in the day.
- The BoE unsurprisingly held interest rates at 0.5% which caused little movement as this was already priced into the market with very little expectation that there would be a rate hike. The Asset Purchase also remained in line with expectation and previous, which again had already been priced into the market and caused little reaction.
- The NIESR quarterly GDP estimate expects a 0.3% drop from previous which further serves to highlight how unlikely an interest rate hike is for the UK in the coming months.
- The ECB did move in favour of a rate hike and pushed interest rates up further by another 25 basis points up to 1.5%. Whilst seemingly having been priced into the market we actually saw the Euro weaken shortly after this release, with the general consensus perhaps being that this was not the smartest move as it goes no way to help some of the already struggling economies in the EU. This was soon reversed however as the Euro did advance for the first time in 3 days and finished yesterday in a strong position.
- It was a positive day for the US yesterday with good figures coming in the form of ADP employment change and also lower initial, and continuing, jobless claims figures. This appeared to show a return to fundamentals in the US as we saw the USD strengthen somewhat against the GBP off the back of this positive data.
Today’s market movers
- In the UK this morning there is some positive data expected in the form of the PPI figures although this is unlikely to have any major effect on the market in itself.
- The German Trade Balance figure is expected to improve today but given current conditions in the EU with Greece and now Portugal, it would be surprising if this caused any significant Euro strength.
- The US is a busy place today with positive data expected. This starts with an expected decrease in unemployment which leads on to the big figure of the day in the Non Farm Pay Roll; this is expected significantly better and could see a move back towards risk appetite as we are expecting positive figures for the US today.