Daily Market Report 07/05/2014

GBP

The UK’s service sector grew at its strongest pace in 2014,
with approximately 100,000 new jobs added in April.

Data from Markit revealed that the sector expanded beyond
expectations from 57.6 in March to 58.7 in April. UK firms reported a sharp
increase in new orders suggesting an increase in business confidence.

GBP

The UK’s service sector grew at its strongest pace in 2014,
with approximately 100,000 new jobs added in April.

Data from Markit revealed that the sector expanded beyond
expectations from 57.6 in March to 58.7 in April. UK firms reported a sharp
increase in new orders suggesting an increase in business confidence.

The pound as a result gained against most of its peers as
analysts become more confident about future growth prospects for economic
growth; with some analysts suggesting that the strength of the UK recovery may
force the Bank of England to raise interest rates sooner. GBPUSD made a fresh
five year high.

EUR

Eurozone service sector growth hit a three high yesterday
rising to 53.1 in April, with an increase in new orders as well as an increase
in employment.

Markit, who released the data, then predicted that the
Eurozone will grow by at least 0.5% in the second quarter of 2014 – with the
upturn led by Germany. Perhaps of more importance economic growth in both Spain
and Ireland has picked up, with the rate of growth for each at its fastest pace
for 7 and 8 years respectively.

USD

The US dollar weakened generally across the board for the
majority of yesterday’s trading but did manage to get some reprieve in the
afternoon after data showed that the country’s trade deficit narrowed by 3.6%
in March to US$40.4bn as exports improved.

However with GDP figures being revised lower for the US and
increased optimism over economic growth in the UK and the Eurozone, we could
well see continued selling pressure on the US dollar.

Key Announcements:

15.00pm – USD – Fed’s Janet Yellen Speech.