Morning Dealer's Comments
The single currency struggled throughout Tuesday’s session despite no clear catalyst on the day. Eurozone CPI came out as expected at 1.3% YoY while the recent run of good German data came to an end with monthly German Factory Orders well below the expected level. Euro/Dollar continues to trade close to its 200 day moving average at 1.1140 however the wider range of 1.1050 – 1.1250 remains in place.
EZ Consumer Confidence @ 10:00am
The Pound traded well against the Euro yesterday but fell versus the Dollar and other major currencies. The House of Commons has returned with focus on the Withdrawal Agreement Bill and ongoing debates; currency markets expect the new UK government to get the Bill passed before it moves to the House of Lords to be ratified. UK PM Johnson meets with President of the EU Commission Ursula von der Leyen which could generate some Brexit headlines.
The Dollar was one of the best performers in G10 yesterday despite Iran retaliating against the US firing rockets at US bases in Iraq. More details can be seen in the ‘Caught the Eye’ section with initial reports of American losses quickly dismissed by US media. US President Trump had been expected to brief US Congress on Iran so markets will watch for any headlines later this afternoon. The only data of note is ADP Employment which will be closely watched ahead of Non Farm Payrolls on Friday.
ADP Employment @ 1:15pm
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7 Jan 2020
Morning Dealers Comments
The Euro traded well yesterday as Services PMIs in Europe were reasonably solid with particular focus on good German numbers, along with Retail Sales earlier in the day, which followed on from better German CPI figures last week. Euro/Dollar remains trapped within the recent range despite testing resistance above 1.12 yesterday morning. The focus for today will be on Eurozone CPI at 10am while any headlines regarding tensions in the Middle East are likely to generate some volatility.
Eurozone CPI @ 10:00am
Sterling was the best performer in G10 yesterday as a more solid risk footing and better Services PMI’s helped Euro/Sterling drop back towards 85p. On the domestic front, the House of Commons returns today with further details of the Withdrawal Agreement Bill expected; the Bill is expected to comfortably pass over the coming weeks. Tomorrow also sees UK PM Johnson meet with new EU Commission President Ursula von der Leyen.
The Dollar recovered from early losses yesterday following better than expected Services PMI’s in the afternoon. The Greenback is trading at its lowest levels in over 6mths as we begin 2020 but focus on Iranian tensions have seen a slight rebound. The funeral of Iranian General Soleimani will be held today which may see some headlines generated; meanwhile House Intelligence Chairman Schiff has suggested that the House of Representatives should open a hearing on the Iran situation.
ISM Non-Manu. @ 3:00pm
2 Dec 2019
Morning Dealers Comments
European data was largely in line with expectations last week but this was not enough to boost the single currency. Euro/Dollar continues to trade in narrow ranges while US data outperformance goes on; domestically this week will focus on PMI’s which begin today as well as GDP on Thursday and speeches from ECB board members. Over the weekend, the SPD in Germany – a coalition partner for Chancellor Merkel – failed to re-elect Vice-Chancellor Scholz as leader increasing political uncertainty.
Sterling was the second best performing currency in G10 last week following the latest YouGov polls showing the Conservative Party maintaining its lead at the top of the polls. With only ten days left until the General Election, the Pound is trading as its best levels in six months and close to key support just below 85p. On the domestic economic front, the only data of note is PMI’s which begin this morning with the latest manufacturing numbers.
Manufacturing PMI @ 9:30am
A shortened week in the US led to a packed schedule, with GDP and Durable Goods ticking higher while PCE Inflation dipped slightly below consensus. The main focus for this week will be on ISM Manufacturing today, PMI’s across the week and US employment data on Friday afternoon. On the political front, trade tensions between the US and China continue with China increasing penalties on IP theft which should help negotiations however President Trump’s Hong Kong Bill may lead to some retaliation.
ISM Manufcturing @ 3:00pm
20 Nov 2019
Euro/Dollar opens the session on the back foot alongside the worsening risk sentiment (see US section). Yesterday we saw more comments from the ECB’s Lane, stating that monetary policy in the Eurozone is not “at the limit”. The focus for the Euro will be the PMI data at the close of the week, which the market expects to tick marginally higher, while Christine Lagarde’s comments on Friday will also be watched to see if she tows the recent ECB messaging – that all is not lost for the ECB’s ability to stoke inflation.
The televised debate between PM Johnson and Labour’s Jeremy Corbyn on ITV yesterday evening was not exactly a game-changer for the upcoming election, although interesting point to note that nearly half of Conservative voters thought Corbyn came across well. For Sterling the outcome has been muted, trading lower vs. both the Euro and the Dollar, with the opinion polls over the next number of days naturally in the spotlight for the currency.
News overnight that the US Senate passed a bill aimed at supporting Hong Kong protestors has risk sentiment starting the morning on the back foot, with China damning in its response (stating that they will retaliate should the bill be passed into law). Aside from concerns regarding US/China trade, the Fed minutes released tonight will be the main focal point in terms of the USD, which are released at 7pm this evening – with the messaging expected to be consistent with the Central Bank on hold unless the outlook materially deteriorates.
FOMC Minutes @ 7:00pm
18 Nov 2019
Euro/Dollar opens the week on the front foot, eyeing up short-term resistance at 1.1095. The German government disappointed last week, deciding to continue on with their disciplined spending agenda, despite calls to spend from new ECB Chief Lagarde. We’re yet to hear from President Trump on the Section 232 auto tariff decision – but he was somewhat hawkish in his rhetoric last week, stating that Europe was in some ways worse than China. We watch out for trade related headlines this week, and release of PMI data on Friday, while a number of ECB speakers are due (including Lagarde on Friday).
No data of note today.
Sterling continues to trade well despite a slew of weaker than expected data last week, with politics well and truly in the spotlight. Opinion polls over the weekend showed an increasingly favourable outcome for Conservatives in the upcoming General Election (a YouGov poll showed Conservatives with their highest lead since 2017, at 45% vs. Labour’s 28%), while an Opinium poll had Conservatives at 44%, up 3% on the week. For the week ahead the focus will be the first televised debate between Jeremy Corbyn and PM Johnson on Tuesday.
No data of note today.
The Dollar finished last week on softer footing, following a raft of weaker than expected consumption and industrial production data. Fed Chair Powell’s comments on the unsustainability of the trajectory for US debt also lend a weaker hand to the USD. This week similar themes will drive the Dollar – with the expected release of FOMC minutes midweek and constant barrage of US/China trade talk headlines (over the weekend both sides had “constructive discussions” via phone call addressing concerns on phase one of trade deal) so we remain with the familiar market drivers for now.
No data of note today.