Daily Update - 19th April 2018
Sterling fell against the U.S. dollar for the second day in a row as disappointing economic data sends the currency, gilt yields and rate hike expectations lower. Meanwhile USD/CAD rose above 1.26 following the Bank of Canada's monetary policy announcement. The tone of their press conference was cautious with Poloz saying the economy is not yet able to stay at full capacity on its own and therefore interest rates may need to remain below the neutral range. They also see companies hesitant to invest because of NAFTA risks. As a result, the BoC feels they need to be data dependent and the pace of rate hikes is a considerable question mark as headwinds prevent a full recovery. As for the U.S. dollar, it traded higher against most of the major currencies with the exception of the Australian dollar and euro. The Beige Book was positive with the Fed districts citing more price pressures, real estate activity, loan growth, consumer spending increases, tight labor markets and a generally modest to moderate expansion in activity. There was nothing particularly insightful in the comments made by Fed Presidents Kaplan, Dudley and Bullard. Early morning, we will see Australia releasing their Jobs reports and it is expected that they have added 20.3k jobs to the economy while the unemployment rate to drop to 5.5%. Then comes the release of UK Retail Sales which is expected to better than last month. In the evening we will see unemployment reports from USA. Last report was better than expected hinting that unemployment is declining in USA. Then it will be the release of Philadelphia Manufacturing Survey which is an indicator of manufacturing sector trends, is interrelated with the ISM manufacturing Index (Institute for Supply Management) and the index of industrial production. Yesterday’s Market
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