Blueprint FX Desk
Blueprint Capital
Market Focus Today
U.K. BoE Minutes
U.S. FOMC
Expect High Volatility in
GBPUSD
EURUSD
Overnight
The Japanese economy grew by 0.6 per cent in the first quarter of 2015, an annualised pace of 2.4 per cent, however most of that was due to a huge build-up of inventories. Although analysts had only forecast an annualised GDP of 1.5 per cent, which to many at first glance appeared strong, if inventories were excluded then the pace of the expansion was just 0.4 per cent which is much more disappointing. The data suggests the Japanese economy is still struggling to build momentum since last year’s consumption tax rise, coming after two years of massive monetary policy stimulus, which will only disappoint the Bank of Japan and Governor Kuroda.
News Roundup
HIGH: Euro-Zone
The ECB yesterday announced it would increase its bond purchasing in May and June in order to cover summer months of July and August where trading in the bond market can be quiet and it may be difficult for the European Central Bank to meet its €60bn target of bond purchases per month. Benoit Coeure, an executive board member said ‘The Eurosystem is taking this seasonal difference into account in the implementation of its expanded asset purchase programme’ and that if further stimulus was required, the ECB would not lower its headline interest rate below its current level of 0.05 per cent. The euro fell yesterday 1.5 percent against the dollar after his comments.
LOW: UK
Deflation in the UK has finally arrived for the first time since the 1960s, with the year-on-year change in the consumer price index (CPI) coming in at -0.1 per cent for April. However, UK economists are almost unanimous in predicting it will be temporary, as is a bullish chancellor George Osbourne, who stated ‘today we see good news for family budgets, with prices lower than they were a year ago and should not be seen as damaging to the overall economy’. We shall see!
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