Will Sterling rebound in the medium term?

Today's Economic Calendar

  • 9:30 - UK Construction PMI

Daily Report

There seems to be growing confidence from many economists that the Pound could significantly rise against the Euro and US Dollars. This on the basis that Theresa May pushes ahead with a soft-Brexit.

The call comes at the start of a busy week in terms of the UK's Brexit journey with Monday bringing with it news for a 'third way' for a future trading relationship being proposed by the UK government, while the week will be book-ended by a critical meeting of the Cabinet to push for an unified stance on what the future relationship will look like. The details of the new 'third way' will not be revealed until after the meeting of the Cabinet at the Prime Minister's country retreat, known as Chequers, and the coming week will therefore be prone to speculation over the matter.

For Sterling, there will be little by way of hard information to trade off, and the malaise the currency has suffered over recent weeks, primarily against the US Dollar, and more recently against the Euro too, will therefore likely extend until more I known about the Brexit plan.

Today we have a light day on the data front, with the release of the UK’s Construction PMI the only reading of note. The second PMI of the weak, accounts for the smallest section of the UK Economy, the construction sector. The construction sector has been pretty stable in a state of small expansion, with two posts above the 50 point mark, both at 52.5, in the last two months. A slight increase to 52.6 is expected today.

Remy Malvy - FX Dealer

GBP To struggle this week?

GBP to struggle this week?

Today's Economic Calendar

  • 09:30 - UK Manufacturing PMI
  • 13:30 - US ISM Manufacturing PMI

Daily Report

The Pound struggled last week, reaching a three-month low against the Euro, as its short-term support level cracked, which has potentially exposed it for further losses in the next week. The Euro shot higher across the board on Friday, after news the EU states had sealed an agreement on migration, a move that offers respite to German Chancellor Angela Merkel whose coalition government faced collapse in the event of no deal being reached.

The Week Ahead in the UK sees the economic data calendar return to life, following a seven-day period in which the few releases of note were released.  The latest surveys of purchasing managers across the manufacturing, construction and services industries over the first half of the week while a speech from Bank of England governor Mark Carney caps off the week's data on Thursday.

Markets are looking for Manufacturing PMI, due at 09:30 am on Monday, to slip from 54.4 in May to 54.1 for the month of June. This afternoons posting from the U.S Manufacturing PMI is expected to remain solid, with a posting of 58.2 due, down from last month’s 58.7.

Sterling will need to see the UK PMI postings come out higher than expected to see it regain it's losses against the Euros and Dollar this week. 

Remy Malvy - FX Dealer

Can Sterling beat the bears in June?

Will Sterling’s Fortunes Improve in June?

The British Pound has weakened sharply against a host of currencies in May thanks to delayed Bank of England interest rate rises and growing concerns over the state of Brexit negotiations; Sterling is currently over 2.5% down against the US Dollar, 2.8% against the Australian Dollar and just over 3.5% against the Yen. The only bright spot for the Pound is against the Euro where the exchange rate remains relatively stable and as we approach month-end the market is currently seeing some small gains.

Of late Brexit negotiations have sought to focus on the future customs relationship; and the UK has found little leeway from the European side of the table which suggests to some commentators that the risks of the UK walking away from the table have grown. But, it's not just Brexit that has currency watchers warning Sterling will struggle over the near-term, the economy and expectations for future rises in the Bank of England's base interest rate could weigh too.

Analysts are expecting continued surprises in the month of June similar to the surprises back in April. There was widespread agreement that April tends to be a positive month for the Pound on the basis of favourable seasonal trends and that it has risen each April for the past decade. However, Sterling fell in April 2018. June sees the European Council meeting on 28thand 29thJune which is seen as an unofficial deadline for the current round of Brexit negotiations to deliver progress. What the negotiating process has taught us to date is that the EU and UK have a habit of getting their act together before these key events, and therefore some good news on progress might just emerge in the run-up to the event.

There is no significant data releases of note.

 Andrew Thomas, FX Dealer

Italian Politics Takes Centre Stage

Italian Politics Takes Centre Stage

Italy appears to be headed back to the polls, and there is a good chance that the two leading anti-establishment parties that won the last vote could increase their vote share in the rerun. The prospect of both Liga and the Five Star Movement increasing their mandate when polls are eventually held appears to have triggered weakness in the Euro. There were suggestions that the failure of the two Eurosceptic parties to form a government could potentially open the door to a return to more moderate, centrist politics in the Eurozone's third largest economy. However, markets have instead begun to believe that recent events would merely entrench anti-EU views amongst the Italian electorate and open the door for a more robust policy agenda from the two leading parties.

The Euro has the potential to rise if economic data improves but given the already soft data for the beginning of the second quarter and the poor Q1 results, this is unlikely to happen soon. Furthermore, the Pound is unlikely to gain much traction higher until Brexit risks are absorbed.

The main release in the week ahead is probably UK Manufacturing PMI for May, out at 9:30 on Friday, which is forecast to rise from 53.9 to 54.9. A higher than expected result would probably push the Pound higher versus the Euro, especially if the final Eurozone Manufacturing PMI result, which is out only a half an hour earlier, continues to show a contrasting move down. For the Euro, the main release in the week ahead for the Euro is inflation data, out on Thursday at 10:00.  

May offered Olive branch by Brussels as she battles Tory's

Week Commencing Monday 23rd September 2017

 

UK: GDP set to come in at 0.3 percent once again, signalling worst trio of results since 2012!

UK GDP growth is set to come in at 0.3 percent for the third quarter when official figures are published on Wednesday. This would mark the third consecutive quarter of growth at that rate, signalling the lowest rate of quarterly performance since the first half of 2012. It seems the pain is set to continue, as economists forecast a lacklustre end to the year and beginning of 2018 as consumers purchasing power is squeezed and Brexit woes continue to impact markets. Diving into the figures, third quarter GDP growth is likely to have been bolstered by strong industrial production performance while Services remained lacklustre.

BREXIT: Europe gives a little, but is it enough to keep May from crumbling!

Trade talks between the UK and EU27 may have inched a little closer last week, as European leaders seek to prop up Theresa May amid speculation she could be axed at any time. In a marked change in stance with the UK, leaders rallied to her defence stating that “issues were being exaggerated” and there is “no doubt” a Brexit deal will be reached. It is now understood that trade talks could start as soon as December, however the major sticking point remains the so-called Brexit bill.

SPAIN: Rajoy seeks to invoke article 155 to seize control of Catalan authorities!

Catalan separatists meet Monday to craft their reply to Prime Minister Mariano Rajoy after the Spanish leader announced an unprecedented number of measures to stamp Madrid’s authority on the region. Rajoy on Saturday shocked many observers with plans to clear out the entire separatist administration in Barcelona and take control of key institutions including public media and the police. Spain’s chief prosecutor said that if Catalan first minister Puigdemont declares independence he would face as much as 30 years in jail and signalled that he could be arrested immediately.

FX Forecast

GBP

Sterling has performed well on the back of renewed Brexit momentum, having broken through the 1.12 level on GBP/EUR. With GDP our this week, we expect a mixed to bullish trend as we draw closer to the end of the week. Should we see further Brexit or further hints of a November rate hike, expect to see strong shifts in either direction.

USD

The Greenback continues to trade within its range as Fed rate hike expectations continue to wain. With little in the way of economic data this week, we expect to see the Dollar trade within its range, potentially spiking on Friday’s GDP release should we see anything above 2.6 percent.

EUR

The Euro continues to perform strongly versus its peers, and with Mario Draghi’s press conference this week we expect this trend to continue. The only drag on the currency at present is pure geo-political risk, with ongoing Catalan and now Austrian/Slovenian elections. We expect these to have little effect this week, however given how fluid these risks are things could change quite quickly.

Economic Calendar

UK

We have a light week for the UK with GDP the only release of note. Once again, we expect a print of 0.3 percent for the quarter, pushing the annual rate of expected growth to a mere 1.4 percent. Given general UK pessimism within the markets at the moment, any print to the upside should provide Sterling and UK assets with a welcome lift.

USA

We have a busier week for the US, starting with Core Durable Goods on Wednesday. We expect to see a 0.5 percent print, while new home sales should come in with a solid 555k. Moving to Thursday, we expect to see Pending Home Sales come in at 0.2 percent versus last months -2.6 percent. Finally, US GDP should post a somewhat disappointing 2.6 percent annualised for the third quarter.

EZ

We have a light week for the Euro with the ECB meeting on Thursday the only release of note. We expect both the Deposit Rate and Interest Rate to remain the same at -0.4 and 0 percent respectively. The Press Conference could be interesting and as usual, any hint of policy shift or Brexit talk will impact FX markets.

 

 

Sterling rallies and nears 2017 highs...

Week Commencing Monday 11th September 2017

 

EZ: Eurozone growth confounds experts ... how high can it get?

The European Central Bank (ECB) has raised its Eurozone economic growth forecast for this year to 2.2 percent, the fastest growth in 10 years.

The health of the Eurozone economy has confounded critics this year after a series of electoral setbacks for Eurosceptic parties in the Netherlands, Austria, and France has boosted business and consumer confidence. The Eurozone’s economy has now expanded for 17 consecutive quarters and unemployment has dropped to a nine-year low of 9.1 percent.

In comparison, In the March-June period, Britain’s economic output grew by 0.3 percent on the quarter, edging up from a sluggish rate of 0.2 percent in the first three months of the year. In its latest forecasts, released in July, the International Monetary Fund estimated the euro zone would grow 1.9 percent this year and 1.7 percent in 2018, above Britain’s projected growth of 1.7 percent this year and 1.5 percent next.

UK: London remains the worlds number 1 financial centre despite Brexit fears!

London remains the globe’s most attractive financial centre, extending its lead over New York despite the UK’s looming departure from the European Union, a survey found on Monday.

London was placed first, followed by New York, Hong Kong and Singapore in the Z/Yen global financial centres index (GFCI), which ranks 92 financial centres on factors such as infrastructure and access to high quality staff. New York was 24 points behind the British capital, the biggest gap between the two since the survey started in 2007.

This is great news to City big wigs, petrified that London will lose its qualitative edge as Brexit rips part of its market away. Fingers cross it continues!

 

FX Forecast

Sterling (GBP) - Sterling continues to push north despite ongoing Brexit woes, hitting the coveted 1.10 versus the Euro and blasting through 1.31 versus the Greenback. We expect this trend to continue, especially as markets get to grips with a less aggressive Federal Reserve in the US. We expect rates to remain range bound, potentially edging northwards versus the Dollar and stable to negative versus the Euro.

US Dollar (USD) - The Dollar continues to struggle after a number of Fed members indicated interest rates would not be going up as fast as previously though. This, coupled with increased concern over Trump’s presidency, should continue to keep the Dollar depressed for the time being.

Euro (EUR) - The Euro continues to defy the odds, having finally pushed over 1.20 on EUR/USD. We expect this trend to continue while we see solid EZ economic data. Brexit continue to weight on GBP/EUR, with both currencies susceptible to Brexit related news flows.

 

Economic Calander for the Week

UK Data:

We have a busy week for the UK with CPI kick-starting the week on Tuesday. We expect inflation to be confirmed in at 2.8% for August, which is 0.2 percent higher than the previous release for July. Moving to Thursdays Bank of England meeting, we expect no policy shifts whatsoever, however the MPC summery and minutes will be closely watched for Brexit and future GDP hints.

US Data:

We start the US week with PPI on Wednesday, which we expect to be posted at 0.3 percent versus last months -0.1 percent previously. This is then closely followed by CPI on Thursday, where we expect to see a 1.8 percent post for the month of August.

Finally, we expect to see a sharp decline in US retail sales for the month, pushing down to a mere 0.1 percent versus last months 0.6 percent print. 

EU Data:

We have a quiet week for the Eurozone with Industrial Production the only highlight. We expect IP to edge up markedly from -0.6 percent to 0.1 percent for July, thereby pushing up the annual figure to an impressive 3.4 percent.

 

Busy week ahead for Sterling...

Week Commencing Monday 4th September 2017

 

UK: Manufacturing surprises with a solid rebound ... finally some good news!

UK Manufacturing PMI smashed through expectations in August, after data showed activity jumped to a four month high in August.

The sector rose to 56.9 from 55.1 in July, considerably higher than market expectations of 55.0 for the month. The data showed production rose at its steepest pace in seven months, with growth in output, new orders, employment, suppliers' delivery times and stocks of purchases.

Demand was chiefly driven by domestic customers, but customers also reported new export orders from mainland Europe, the US, China and Australia. Despite the news, the Pound barely reached to the news, making a brief gain versus the Dollar before falling back to 1.2928.

Meanwhile, Sterling edged up a meagre 0.1 percent against the Euro, settling at 1.0866. This comes as Brexit talks intensify, with the third round of talks in Brussels underway last week. It seems unlikely that the so-called “sufficient progress” stage has been met to enable discussions on future trading relations, and as such Markets remain on high alert. Will the politicians find a way to break the deadlock!!

US: Jobs disappoint ... what Trump tweet can get out of this one!

The US economy added 156,000 jobs in August, less than the previous month and below expectations. Analysts had expected US non-farm payrolls to rise by between 175,000 and 185,000 last month.

The unemployment rate ticked up from 4.3 percent to a still-low 4.4 percent, the Labour Department said Friday. The government also revised down its estimate of job growth in June and July by a combined 41,000, leaving an average monthly gain this year of a solid 176,000.

One persistent soft spot in the job market is pay raises, which remain tepid. Average hourly pay rose just 2.5 percent over the 12 months that ended in August. Wage growth typically averages 3.5 percent to 4 percent annually when unemployment is this low.

The slowing job gains, coupled with uncommonly low inflation, might make the Federal Reserve hesitant to raise its key short-term interest rate by December, when many Fed watchers had foreseen the next rate hike.

 

FX Forecast

Sterling (GBP) - Sterling remains under Brexit related pressure, despite the solid Manufacturing PMI numbers. Having been trading in the 1.07’s versus the EUR and 1.27’s versus the Greenback, these current “highs” seems unsustainable. This maybe reversed if we see a decent Services PMI print this week, however in general bias continues to the downside.

US Dollar (USD) - The Greenback continues to struggle to build traction versus most majors, especially with its recent jobs posting. This is likely to continue, given traders re-evaluation of the potential US rate hike curve being flattened. Expect EUR/USD to continue to trade in the 18’s, potentially pushing 19.

Euro (EUR) - The Euro is maintaining its bullish stance, despite giving some ground to Sterling last week. We expect this trend to continue as EZ news continues to surprise to the upside. Expect 1.07 this week versus Sterling, especially if we see weak Services numbers.

 

Economic Calander for the Week

UK Data:

In the UK we await the results of August’s Services and Construction PMI surveys, with Construction looking set to increase to 52.0 and Services to decline from 53.8 to 53.5.

We then turn our attention to the end of the week with UK Industrial and Manufacturing Production. We expect IP to come in flat at 0.3 percent for the month, while Manufacturing will edge up markedly to 1.7 percent form 0.6 percent previously.

US Data:

We start the US week with Factory Orders, which seem likely to disappoint with a -3.3 percent print this month. This is followed by Initial Jobless Claims on Thursday, which is widely expected to edge up to 242k from 236k last week.

Finally, US Consumer Credit on Friday should edge up to a sizable USD 15b from June’s 12.397 billion.

EU Data:

The main release for the Eurozone is EZ Retail Sales, with markets expecting a sizable decline from last months bullish 3.1 percent print, down potentially to 2.5 percent on the month. Other releases include Eurozone GDP, which is likely to be confirmed in at 2.2 percent.

We also have the ECB meeting for the month, and while we do not expect any policy shift and mention of Brexit during the press conference could stoke volatility.

 

Big data releases this week...

Week Commencing Monday 14th August 2017

 

JAPAN: GDP jumps as consumers sentiment rebounds!

The Japanese economy grew in the second quarter at the fastest pace in more than two years as consumer spending and capital expenditure both rose at the fastest rate in more than three years.

GDP expanded by an annualised 4.0 percent in the second quarter, according to official government data, considerably further than the market estimate of 2.5 percent. Compared to the previous quarter, the economy expanded 1.0 percent versus a median estimate for 0.6 percent growth.

Diving into the numbers, private consumption, which accounts for about 70 percent of GDP, rose by 0.9 percent from the previous quarter, beating market expectations of 0.5 percent. Capital expenditure jumped by 2.4 percent in the second quarter, doubling estimates of a 1.2 percent jump. It was not all plain sailing however, with a disappointing -0.3 percent GDP impact from external demand, mainly due to a increase in imports.

 

UK: The Brit's publish documents ... will the Europeans accept them?

The UK has sought to break the Brexit stalemate as it publishes detailed strategy papers surrounding the next phase of Brexit talks.

Britain is desperate to start talking about its post-Brexit relationship with Europe, wary of the need to reassure businesses, citizens and investors. Brussels, however, has insisted that progress must be made on divorce arrangements first.

Opening rounds of talks with Brussels have seen little common ground, with EU negotiators demanding greater clarity from the British delegation. The EU has warned that an already-tight timetable could be delayed ahead of a scheduled March 2019 exit. Britain said it was preparing to publish several papers, including plans for a new customs arrangement and a proposal on how to resolve the difficulties of a physical border between Ireland and Northern Ireland. With the next round of talks due to start at the end of this month, there is much riding on these three individual documents.

The faster consensus can be reached, the better general UK and Sterling prospects become. The decision to announce the publications indicates Britain's desire to counter criticism from Brussels about its approach to the talks. In July, EU officials said progress was difficult not because Britain had unacceptable demands, but because it had no position at all on many issues.

 

FX Forecast

Sterling (GBP) - Sterling continue to struggle versus both the Euro and US Dollar as fundamental economic data points further south. Having broken the 1.10 level against the Euro, we see further declines to the 1.08 range this week. The Dollar found some beans over the weekend, pushing back at recent GBP gains to a new sub-1.30 range. We expect this to continue, especially if we see weak Retail Sales numbers on Friday.

US Dollar (USD) - The Greenback has seen some reversal in fortunes versus most majors, with Sterling being pushed back below 1.30 and 1.17 back on the radar on EUR/USD. With the FOMC on the radar this week, any hints of further monetary policy tightening will likely provide more USD strength, potentially seeing new ranges against most majors.

Euro (EUR) - The Euro continues its reasonably robust form, with it holding its own versus most majors. We are likely to see further gains versus Sterling as we draw closer to the next round of Brexit negotiations. CPI is the only release of note and is unlikely to shift sentiment unless we see a print widely off the mark.

 

Economic Calander for the Week

UK Data:

We have a busy week for the UK with Inflation and Retail Sales the key drivers of market activity. We expect inflation to edge up from the 2.6 percent printed last month, potentially hitting 2.7 percent for July. On Wednesday we have both the Claimant Count, which we expect to increase by 3.7k while average earnings should continue to push up by 1.8 percent. Finally, Retail Sales will be the highlight, with a disappointing 0.2 percent print widely expected on Friday.

US Data:

We have a busy week for the US with Retail Sales kicking off the week on Tuesday. We expect to see sails return to normal from last months -0.2 percent prints. For Core we expect a 0.3 percent number this month while non-core should come in slightly higher at 0.4 percent.

The FOMC highlights on Wednesday and any hint of a more aggressive monetary policy tightening will likely send the Dollar skyward. Meanwhile, the Philly Fed Manufacturing index on Thursday should see some marginal declines on the month, posting 18.5 versus last months 19.5 print.

EU Data:

In Europe we have the all important inflation numbers on Thursday, where we expect to see a continuation of the 1.3 percent numbers for July. Outside this, obviously further Brexit related news will likely impact both EUR and GBP sentiment moving forward.

 

US jobs data strengtherns the US Dollar...

Week Commencing Monday 7th August 2017

 

US: Jobs just keep on pointing north as Trump hails new economic policy!

The US economy continued its strong summer, adding 209,000 jobs in July while the unemployment rate fell to 4.3 percent, the lowest since March 2001.

The number of employed Americans hit a new high of 153.5 million thanks to a surge of 345,000. The employment-to-population ratio also moved up to 60.2 percent, tied for the highest level since February 2009.

Bars and restaurants provided the biggest boost for the month with 53,000 more positives, while professional and business services contributed 49,000, according to the Bureau of Labor Statistics. In addition to the strong July report, June's 222,000 gain was revised up to 231,000 though May was cut from 152,000 to 145,000.

US stocks plotted a modest advance when markets opened, with the major benchmark indices already sitting near record highs after a stronger than expected earnings season. The S&P 500 rose 0.2 percent to 2,478, led by a rally in bank stocks that took the sector to its highest level in nearly 10 years.

UK: UK growth to remain but lacklustre ... so still in the game!

The UK economy looks set for steady but sluggish growth over the coming months, according to the much anticipated Services PMI survey that showed businesses in sombre mood about their prospects ahead of Brexit.

The figures added to signs that Britain's economy is struggling for momentum after its slowest start to the year since 2012, and bolster the case for the Bank of England to keep interest rates on hold later on Thursday.

The services PMI follows more upbeat numbers on Tuesday from the much smaller manufacturing sector, and weak construction figures on Wednesday. While manufacturing exporters have gained from the fall in Sterling since last year's Brexit vote, Thursday's survey showed consumer facing businesses have been struggling due to a reduction in demand as household budgets are stretched.

 

FX Forecast

Sterling (GBP) - Sterling extended losses against both the Greenback and the Euro last week as markets readjust to lower UK growth expectations. With a limited data set this week, we expect Sterling to remain range-bound, with a bias to the downside. Expect GBP/USD to pivot the 1.30, potentially dropping back into the 20’s. GBP/EUR is hovering above 1.10 and is likely to drop below once again.

US Dollar (USD) - The Dollar recovered slightly from its lows last week after positive US job numbers. Concerns continue to weigh on growth however, with Fed interest rate woes and geo-political issues continuing to push the Dollar back. We expect EUR.USD to continue to trade within the 1.18 pivot, potentially pushing towards 1.19 if the Euro sees decent gains.

Euro (EUR) - The Euro continues its push versus most majors, hitting Sterling hard last week. We expect this trend to continue, with 1.10 firmly in its sights. The Euro continues to be susceptible to Brexit related news, and will continue to react to headlines.

 

Economic Calander for the Week

UK Data:

We have a light week for the UK with Manufacturing Production on Thursday the only release of note. We expect production to jump up from last month’s disappointing -0.2 percent to a flat 0.0 percent. Aside from this, UK new remains extremely susceptible to Brexit related releases, so we maintain a sharp eye on press reports from Brussels.

US Data:

We have a busier week for the US, with JOLTs Job Openings for June kickstarting the report on Tuesday. We expect 5.660m openings to be reported versus last months 5.666, which should do little to stoke markets.

Moving to Crude Oil Inventories, we expect supply to decline by -1.527 million barrels, while PPI for July should remain stable at 0.1 percent. Finally, Core CPI on Friday should edge up to 0.2 percent versus last months 0.1 percent increase.

EU Data:

We have no European economic data of note this week, therefore as with the UK we continue to monitor Brexit related news stories in addition to continued Greek debt issues.

 

Both Sterling and the USD remain weak against Euro...

Week Commencing Monday 31st July 2017

 

UK: Growth upgraded but still lagging behind a bullish EU!

ONS forecasters have upgraded their assessment of the UK economy for the second quarter, revising up their three months to June estimate to 0.3 percent from 0.2 percent.

The Office for National Statistics (ONS) said that growth in the three months up to the end of June was driven by services, which expanded by 0.5 per cent compared with 0.1 per cent growth in the first quarter of the year. Overall, the data, which was in line with consensus forecasts, however still meant that the UK the worst performing economy in the EU at the start of the year. That figure also represented a dramatic slowdown from the 0.7 percent growth in the final quarter of 2016, and the 0.5 percent growth in the quarter immediately following the referendum.

Although the second quarter GDP matches the Bank of England's May inflation report, the uninspiring growth in the first half of the year, half that seen in the latter part of 2016, will mean hitting the full year prediction for GDP growth of 1.9 percent will require a steep improvement in the second half of the year.

In further news, Employment rate reached a record high of 74.9 percent during the second quarter, while total real wages fell 0.7 percent compared with a year earlier, which was the most since August 2014.

Greece: First Greek Bond sale creates 5th largest bond market in EZ!

Greece’s new soon to be sold bond is already the fifth most traded euro-denominated sovereign debt in Europe, as Athens marks a successful return to the markets for the first time in three years this week.

The sale of a new five-year bond on Tuesday was a way for Prime Minister Alexis Tsipras to show that Greece can cut its debt-servicing bill and carve out a path to exit its bailout program. Of the 3 billion euros in bonds sold, just under half was fresh money with the remainder exchanged for older notes maturing in 2019.

US investors bought 44 percent of the new bonds, while Greeks took 14 percent. In contrast, Greek investors accounted for 75 percent of the bond-switch. Greece is now into its third bailout loan programme. The main source of finance has been the Eurozone - for the first loan the money came from other governments that use the currency, and EU bailout agencies supplied funds for the second two.

In total Greece has received bailout payments of more than a quarter of a trillion euros, and there's as much as 47bn euros more available over the next year.

 

FX Forecast

Sterling (GBP) - Sterling remains under pressure versus the Euro as economic fundamentals continue to push EU numbers skywards. We expect continues declines, albeit marginal declines, against the Euro as we see BoE numbers released to the market. Expect 1.11 to be targeted this week, which the Dollar should offer sizable resistance around 1.32.

US Dollar (USD) - The Dollar continues to shift lower as fears continue to mount of Janet Yellens future at the Fed, along with a deteroation of the Fed’s rate hike pathway. We expect EUR/USD to continue to climb, potentially pushing 1.18 this week. GBP/USD continue to hover above 1.30, with 1.32 potentially on the cards.

Euro (EUR) - The Euro continues to assault most major currencies on a raft of exciting economic data. We expect decent numbers this week, and as such expect further gains against both Sterling and the Greenback.

 

Economic Calander for the Week

UK Data:

We have a busy week for the UK with the Bank of England set to release their minutes on Thursday. Mark Carney’s press conference is the one to watch and any comments on either Brexit or the lacklustre economic growth we have seen is likely to move markets.

We expect no shift in voting intentions within the committee, with 3 voting for a rate hike while 5 voting against. We also have the PMI’s to watch out for, with Manufacturing expected to come in flat at 54.3, Construction to come in down at 54.0 versus last months 54.8 and finally Services should rebound slightly at 53.7.

US Data:

We start the Dollar week with ISM Manufacturing PMI on Tuesday, where we expect a marked decline from 57.8 to 56.5. This will also lead to a ISM Prices Paid for July index to increase from 55 to 56. Moving to Friday, Nonfarm Payrolls for July should fall from 222k to 183k, while the unemployment rate will continue to decline, hitting new lows of 4.3 percent.

EU Data:

We have a busy week for the EU with EZ GDP the highlight on Tuesday. We expect to see combined EZ GDP posted at 0.6 percent for the second quarter, drastically higher than the UK’s print. In other releases, we expect CPI to come in at 1.3 percent for the month, while we await the notes from the ECB meeting on Wednesday.

 

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