Sale of British firm BG group bolsters the Pound

Yesterday’s markets

9th April 2015

  • EUR Retail PMI 48.6
  • FOMC Meeting minutes

On a relatively quiet day on data releases Sterling rose against the Dollar and the Euro as Royal Dutch Shell agreed to buy out the British firm BG Group, in a deal just shy of £50bn.  This deal is set to be one of the biggest of 2015, there was also rumuors that French media conglomerate Vivendi were in talks to purchase Sky for around £28bn, which drew demand for the Pound to fund the acquisitions as it rose more than 1% against the greenback.

Attention was again on Greece as Prime Minister Alexis Tsipras met with Russian president Vladimir Putin.  Speculation around this meeting was that Athens could possibly turn to Russia for financial aid, but Putin indicated that Alexis Tsipras did not ask for any aid or any such requests, but instead the respective Prime Ministers discussed cooperation in various sectors of the economies, including the possibility of developing major energy projects.  Putin did state that Greece could not be exempted from a ban on food imports imposed by them on the European Union, due to the sanctions against them over the Ukraine crisis.  As Athens is due to repay the IMF €448m by the end of tomorrow the single currency could see some uncertain volatility as this saga conftinues.

Last night saw the release of the Fed minutes from last month’s central bank meeting.  It showed that officials were divided on whether interest rates would begin to raise by June's next meeting.  Several Fed members thought that June would be the right time to raise rates, while the other officials stated concerns of a strong Dollar weighing on inflation and energy price declines warrant keeping rates on hold.

Today’s markets

8th April 2015

  • GBP Bank rate vote
  • GBP MPC Rate statement
  • CAD Building permits
  • USD Unemployment claims

 

Today sees the Bank of England interest rate decision likely at 12:00 GMT, with the rate expected to remain at the historic low of 0.50% and asset purchases to remain at £375bn.  Shortly followed by the weekly unemployment claims posted from the U.S. where claims are forecast to increase to 283k.