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Market Update

• Posted by currencies in Bank of England, coronavirus, Currency, Dollar, Economy, EUR, Fed, GBP, Inflation, Rate Cuts, Retail Sales, Sterling, UK, Uncategorised
• April 11, 2023
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Markets have been quiet due to the extended Easter Bank Holiday weekend- but on Friday we did have U.S NFP’s release- and though the number was better than expected, the market seems to now be in agreement that the last few months of job cuts globally will now start feeding into jobs numbers and that it is simply the fact that the U.S jobs numbers have not cottoned on to that yet, it takes a while for someone to be let go of their job, look for another, and then finally end up on the jobless claimant list- around 3/4 months to be exact- so the job losses from December will only now start feeding into the current numbers.

Over this next week we have a few data releases that could affect the market and with GBPEUR starting the week at 1.14 and GBPUSD starting the week above 1.24- it will be interesting to see where we end up by Friday.

On Wednesday we have Core inflation data out of the U.S which is expected to show a slight rise to 5.6%, with the overall year-on-year inflation rate to land at 5.2% (previously at 6%)- overall this is going in the right direction but still a long way from the Fed’s 2% target- and this I am sure will be echoed in the next Fed speeches that we get. Later on Wednesday BoE Governor Bailey will be speaking, we have no predictions for this particular speech but as always we will be looking for any forward guidance on May’s interest rate decision. Lastly on Wednesday we have the FOMC minutes at 7pm which will give us an idea of the Fed’s thinking at March’s meeting- and what could be expected in their next one- right now it still seems likely that the Fed hike again, but this will give us more of an idea- we also have another speech from Governor Bailey in the evening which is worth noting.

On Thursday we have UK GDP numbers which are forecasted at 0%- generally this is not good at all however anything that is not a negative number could be viewed as a positive in this current climate- we also have the balance of trade numbers coming out alongside industrial and manufacturing production- which are both expected better than the previous month- however it is worth noting these are February numbers so are not as up to date so we do not expect massive market movement. Lastly, on Friday we have U.S retail sales, industrial production, and Michigan consumer sentiment which could all have an effect on the Pound to Dollar exchange rate- so all in all I am expecting a lot of volatility this week.