Market Drivers May 21, 2015
EZ PMI come in mixed
UK Retail Sales
Nikkei 0.03% Europe -0.57%
Oil $59/bbl
Gold $1209/oz.
Europe and Asia:
CNY HSBC PMI 49.1 vs. 49.4
EUR EZ Flash PMI Man 52.3 vs. 51.8
EUR EZ Flash PMI Services 51.4 vs. %1.9
GBP UK Retail Sales
North America:
USD Jobless Claims 8:30
USD Philly Fed 10:00
USD Existing Homes 10:00
UK Retail Sales blew past estimates showing strong pickup in consumer demand which helped to lift pound by more than 100 points in morning London trade.
Cable soared to a high of 1.5667 in the wake of better than expected data that saw UK Retail Sales rise by 1.2% versus 0.4% eyed. Spending rose 1.8% on a month over month basis indicating that consumers are not only willing to pay more, but to do higher volume of goods and services.
Average prices fell 3.2% versus last year with energy costs dropping the steepest at -11.5%. Some of those declines are unlikely to repeat themselves as oil prices have moderated, but the fact that the UK consumer is clearly happy to increase spending in the wake of higher wage growth and lower gas prices is good news for the UK economy and welcome sign for the BoE.
The transmission mechanism of higher wage growth and better spending is likely to expedite the normalization process for BOE and trader reacted positively to the data keeping cable well bid at the 1,5650 level. If US economic reports prove disappointing later in the day, sterling could climb to 1.5700 as the global day proceeds.
Elsewhere the EZ Flash PMI data came in mixed with Manufacturing a bit better but Services dropping slightly. PMI Manufacturing printed at 52.3 versus 51.8 eyed while Services came in at 53.3 versus 53.9 projected. Germany was laggard seeing its Manufacturing decline a bit more to 51.4 versus 52.1 the month prior. Although the overall figures show expansion, the rate of growth in EZ has clearly stalled and shows that ECB will have to remain vigilant in its QE effort to ease credit conditions further and stimulate economic activity.
Euro seesawed but popped higher in the aftermath of the news, dragged there by anti-dollar flows and remained at 1.1150 for most of the EU session. Yesterday's slightly dovish FOMC minutes continue to weigh on the greenback but today's eco data could provide the dollar with a boost if comes in above expectations. The Existing Homes number will be of particular interest to the market as it could confirm that the housing market is coming back and would therefore add to the growth in Q2 of this year.
EZ PMI come in mixed
UK Retail Sales
Nikkei 0.03% Europe -0.57%
Oil $59/bbl
Gold $1209/oz.
Europe and Asia:
CNY HSBC PMI 49.1 vs. 49.4
EUR EZ Flash PMI Man 52.3 vs. 51.8
EUR EZ Flash PMI Services 51.4 vs. %1.9
GBP UK Retail Sales
North America:
USD Jobless Claims 8:30
USD Philly Fed 10:00
USD Existing Homes 10:00
UK Retail Sales blew past estimates showing strong pickup in consumer demand which helped to lift pound by more than 100 points in morning London trade.
Cable soared to a high of 1.5667 in the wake of better than expected data that saw UK Retail Sales rise by 1.2% versus 0.4% eyed. Spending rose 1.8% on a month over month basis indicating that consumers are not only willing to pay more, but to do higher volume of goods and services.
Average prices fell 3.2% versus last year with energy costs dropping the steepest at -11.5%. Some of those declines are unlikely to repeat themselves as oil prices have moderated, but the fact that the UK consumer is clearly happy to increase spending in the wake of higher wage growth and lower gas prices is good news for the UK economy and welcome sign for the BoE.
The transmission mechanism of higher wage growth and better spending is likely to expedite the normalization process for BOE and trader reacted positively to the data keeping cable well bid at the 1,5650 level. If US economic reports prove disappointing later in the day, sterling could climb to 1.5700 as the global day proceeds.
Elsewhere the EZ Flash PMI data came in mixed with Manufacturing a bit better but Services dropping slightly. PMI Manufacturing printed at 52.3 versus 51.8 eyed while Services came in at 53.3 versus 53.9 projected. Germany was laggard seeing its Manufacturing decline a bit more to 51.4 versus 52.1 the month prior. Although the overall figures show expansion, the rate of growth in EZ has clearly stalled and shows that ECB will have to remain vigilant in its QE effort to ease credit conditions further and stimulate economic activity.
Euro seesawed but popped higher in the aftermath of the news, dragged there by anti-dollar flows and remained at 1.1150 for most of the EU session. Yesterday's slightly dovish FOMC minutes continue to weigh on the greenback but today's eco data could provide the dollar with a boost if comes in above expectations. The Existing Homes number will be of particular interest to the market as it could confirm that the housing market is coming back and would therefore add to the growth in Q2 of this year.
Recommended Content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Week ahead – SNB to cut again, RBA to stand pat, PCE inflation also on tap
SNB is expected to ease for third time; might cut by 50bps. RBA to hold rates but could turn less hawkish as CPI falls. After inaugural Fed cut, attention turns to PCE inflation.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.