Forex News

Summary GDP growth of 4.1% y-o-y in Q1 came below expectations on weak performance of fixed investment, domestic demand and fast growing imports. However, upward revisions in Q1 GDP growth are likely, in our opinion, and we already observe signs of economic growth accelerating in Q2 on the back of higher oil prices.

US government hits its debt ceiling and US Treasury deploys extraordinary measures; USTs remain bid EcoFin now looking at Greek debt reprofiling – some (modest) downside risks to EURUSD.

Yesterday was somewhat inconclusive for FX markets. NZD/USD broke lower from its recent trading range but confirming signals failed to materialise in the other commodity currency markets

The May release of the German ZEW index of investor confidence provided yet again mixed signals. While the current conditions balance improved to 91.5 and thus the highest level seen so far in the cycle, the expectations balance reflecting six-month forward investor sentiment declined for the third consecutive month, down by 4.5 points on the […]

Ben Broadbent, who is to replace Andrew Sentance on the MPC at the end of this month, today gave testimony to the Treasury Select Committee.

Bonds have some marginal gains left in them with the Bund exhibiting an ending diagonal.

In our most recent edition of Currency Strategy published last week our overall GBP rating was downgraded compared to the previous report due to weak fundamentals and an adverse technical outlook. Despite its inexpensive trade weighted valuation, we remain negative towards GBP.

CPI inflation increased to 4.5% y/y in April, significantly above expectations (consensus 4.1%, BarCap 4.2%, last 4.0%). Core inflation was 3.7%, above consensus expectations of an unchanged 3.2%. However, RPI inflation was in line with expectations, falling to 5.2% from 5.3% (BarCap 5.3%).

EUR USD (1.4170) Eurozone finance ministers approved a €78bn bailout package for Portugal last night, but left a conclusion on Greece for the meeting in June.

News BG: Mixed – C/A balance brings YtD surplus to 0.7% of GDP (p2) CZ: Mixed – April PPI accelerates to 6.4%YoY, C/A posts surplus (p2)

Today’s highlights: EUR/USD: Bearish “outside” Friday through critical 1.4156/48 price/retracement support to probe 1.4038/220 support.  Risk of surrender here to target 1.3655