Morning Report: 4 April 2016
4th April 2016 By: Ranko Berich
GBP Sterling saw more dramatic weakness against the euro on Friday, falling to its weakest level against the single currency since 2014 while also selling off against USD. Although weakness against the euro was the main theme of last week’s trading, Friday’s main UK data release also fell short of expectations, with Markit’s Manufacturing Purchasing Managers’ Index showing only a marginal improvement from last month. This morning at 09:30 BST Construction PMI will be released, followed tomorrow by the equivalent survey for the Services sector. Later in the week, Manufacturing Production data will be released on Friday.
EUR The euro could do no wrong last week, and continues to look fairly bullish this morning having weakened only slightly to USD after Friday’s Non-Farm Payrolls report. The Sentix Investor Confidence Survey will be released this morning at 09:30 BST, followed at 10:00 by eurozone Unemployment and the Producer Price Index. German Factory Orders will be out tomorrow, followed by Services sector survey data, and later in the week on Thursday the European Central Bank’s latest meeting minutes will be released.
USD After a strong Non-Farm Payrolls report on Friday USD is broadly stronger than most major currencies, although it did not manage to hold on to most of its gains against the euro. The NFP report featured strong headline job creation, surprisingly rapid wage creation, and an increase in the labour force participation rate. All of these point towards a healthy labour market that is currently weathering the supposed downturn in business confidence and output growth in the United States. However, the report is unlikely to prove a game changer for monetary policy, as the increase in labour force participation may prompt policy makers at the Federal Reserve to believe there is more slack in the labour market than previously thought. This week’s biggest release will be the Federal Open Market Committee’s latest meeting minutes, which may shed some light on how the Fed is likely to approach monetary policy in the immediate future. Today at 15:00 BST Factory Orders data will be out alongside the Labour Market Conditions Index.
CAD The loonie has weakened over the last three days, and this trend appears to be continuing this morning. Friday’s Manufacturing Purchasing Managers Index from the Royal Bank of Canada showed that the surveyed manufacturers were experiencing improving business conditions overall, a surprising improvement from last month’s survey. Today at 15:00 BST the Bank of Canada’s Governor Stephen Poloz will speak. Tomorrow, monthly Trade Balance data will be released.
- The Telegraph. Lloyds promises to help 5,000 SMEs become new exporters. Lloyds Banking Group has announced a new initiative to help thousands of UK businesses become first- time exporters, in an effort to reverse the country’s growing trade deficit.
- Financial Times. UK construction activity remains at 10-month low – Markit. The pace of growth in the UK construction industry remained at a 10-month low in March, adding to a picture of weakness in the first quarter of 2016 compared to the closing months of last year.