Yesterday's Market Movers
- German Trade Balance narrowed from 15.1Bn to 12Bn and Industrial Production (YoY) April slowed down to 9.6% from the previous 11.2%. The German economy is slow down in the exports and manufacturing as the Chancellor Angela Merkel concerned the other day.
- EU GDP Q1 QoQ was up 0.8% and YoY was up 2.5%, both of which came out better than the previous, but in line with the expectation. The Euro was not supported by the data, trading around 1.4640 from 1.4680 in the morning session, later we saw further down to 1.4560.
- Before the US Fed's Beige Book released, we had a relatively quiet “dollar session”, GBP and Euro against US Dollar were trading around the level from morning. GBP/USD performed quietly after the drop from 1.6430 level to 1.6350 due to the Moody’s negative concerns about the UK economy.
- Beige Book confirmed the break in the supply chain, saying it is positive for the economy hence it could explain the growth problem recently and will pick up once supplier return to normal. Overnight we saw a weak US dollar against major counterparts, which shows the confirmation of the supply chain disruptions have not changed the confidence of the economy.
Today's Market Movers
- UK Trade Balance and Goods Trade Balance are due to come out better than the previous according to the market consensus. Meanwhile we will have BoE Interest Rate Decision, the markets who have not been hoping to see an interest rate change however are expecting BoE take some measures on helping the slowing down economy. This morning we had Sterling against Dollar climbed back to 1.6430 level.
- ECB Interest Rate Decision is coming out with a “remain interest rate unchanged” prediction as well. If the comments give out a precise indication (e.g. they are going to increase the rate in July), we could see EUR/USD go back to the previous strong level and GBP/EUR go lower than yesterday’s low 1.11 level.
- The US Trade Balance is expected to have a slightly lower reading, while Initial Jobless Claims and Continuing Jobless Claims are coming out with some improvement from the previous week. Linked to Ben Bernanke speech on Tuesday: the recovery “appears to be proceeding at a moderate pace”, the data might start to give out positive reading for the economy hence we will probably see dollar weakness to be under control.