Markets digest last week’s poor US data

Yesterday’s markets

10th May 2016

  • EUR German Factory Orders m/m: 1.9%
  • GBP Halifax HPI m/m: -0.8%
  • EUR Eurogroup Meetings
  • CNY CPI y/y: 2.3%
  • CNY PPI y/y: -3.4%

Last week’s poor US labour data seems to have set the tone this week as the likelihood of even one rate rise this year in the States has diminished. Non-Farm pay rolls posted a worse than expected 160k on Friday, a three month low. Expectations of further divergent monetary policy are not proving to be a strong or reliable driver of currency markets. There would have to be a very strong pick up in both activity and prices data for a move to be seen this quarter. Brexit concerns still remain, and are keeping Sterling relatively grounded as we hover around a key psychological mark. 

The Brexit debate will heat up as we have a number of key figures speaking on the matter this week. We are due speeches from the Chancellor of the Exchequer George Osborne, Bank of England Governor Mark Carney and the head of the International Monetary Fund Christine Lagarde. There is approximately 20% of voters who are still undecided so this week could well be a pivotal week for the June 23rd Referendum.

Today’s markets

9th May 2016

  • USD FOMC Member Dudley Speaks
  • USD Goods Trade Balance
  • USD JOLTS Job Openings
  • NZD RBNZ Financial Stability Report
  • NZD RBNZ Gov Wheeler Speaks
  • NZD RBNZ Gov Wheeler Speaks

Again very little data releases will hit the wires today. The world’s second largest economy China, will post their y/y inflation figure which is expected to remain constant to the last reading of 2.3%. Germany and France will release their monthly Industrial Production readings. We can also expect to see the Trade Balance figures for Germany and the UK also. From the US, further labour data is to be seen from the JOLTS job openings.