Morning Report: 8 April 2015
8th April 2015 By: Ranko Berich
GBP Sterling continued to fall back against the US dollar yesterday, despite some optimistic economic data. The Services Purchasing Managers Index for March rose to 58.9, its highest level in five months. A reading above 50 indicates growth in the sector and so March’s figures point towards a potential increase in growth in the economy as a whole, due to the importance of Britain’s service sector. Meeting Minutes from the Bank of England’s Financial Policy Committee yesterday showed that the Bank has become increasingly concerned by the possibility of a Greek exit from the euro and is taking steps to prepare the British banking sector for such an event. Today will be a slow day for UK data, although the Bank of England’s Credit Conditions Survey will be released at 09:30 BST.
EUR The euro’s retracement from the highs it reached against USD last week suggests that upside may be limited for the single currency, despite a recent improvement in economic conditions. Services Purchasing Managers Index data was released for the Spanish, Italian, and European economies yesterday. All three indices showed healthy improvement in activity and sentiment among the surveyed businesses. The results were underlined by research agency Sentix’s Investor Confidence index, which rose to 20.00, well in expansionary territory. To round off the good news, Producer Prices in the eurozone finally picked up 0.5% in February after months of decline since November. Today at 09:10 BST Retail PMI will be released for the eurozone, followed at 10:00 GMT by Retail Sales.
USD USD is recovering well this week considering the blow it was dealt last Friday by disappointing payrolls data. The Job Openings and Labour Turnover Summary for February was released yesterday and showed that Job openings increased to 5.13 million. This is certainly good news, but the JOLTS report is released with a one month lag, and so the disappointing payroll report for March is likely to remain front of mind for now. Today at 19:00 BST minutes will be released for the Federal Open Market Committee’s most recent meeting. Given the Fed’s last statement contained a number of changes to forward guidance, the discussions of members will be closely watched tonight.
CAD With crude oil prices trading within a reasonably stable range and a lack of fundamental data, it is unsurprising that CAD has traded in tight ranges this week. Developments elsewhere are likely to lead trading today, with no data released yesterday and none scheduled until tomorrow’s housing market data releases at 13:30 BST.
- Reuters. UK shop prices fall in March at fastest rate since 2006 – BRC: Prices in British shops fell last month at the fastest rate since records began more than eight years ago, pulled down by a sharp decline in food prices, the British Retail Consortium said on Wednesday.
- Reuters. Rebound in UK services PMI points to first-quarter GDP boost – Markit: Growth in Britain’s services sector rose sharply last month, pointing to a speeding up of overall economic growth in the first three months of 2015, financial data company Markit said on Tuesday.
- Daily Mail. Britain’s recovering economy ‘moves up a gear’, boosting Conservatives ahead of next month’s General Election: Britain’s recovering economy has ‘moved up a gear’, boosting the Conservatives ahead of next month’s General Election, according to figures published yesterday.
- Telegraph. Bank of England warns on Britain’s payments deficit: Financial Policy Committee minutes say the UK’s record current account deficit could hit investor confidence in downturn.