FX News Today

European Council President Donald Tusk called for a deal in Greek debt talks by the end of the month and said more intensive efforts were needed for that to happen. Talks are dragging on over reforms Greece must carry out to complete the review of its third international financial rescue package, as well as on contingency steps that Athens must prepare in case it misses its fiscal targets. (source: Reuters)

Chinese authorities are training their sights on a new set of targets: economists, analysts and business reporters with gloomy views on the country’s economy. Securities regulators, media censors and other government officials have issued verbal warnings to commentators whose public remarks on the economy are out of step with the government’s upbeat statements, according to government officials and commentators with knowledge of the matter. (source: Wall Street Journal)

New Zealand’s jobless rate rose in the first quarter as the nation’s labour force recorded its biggest increase in 12 years and Auckland drove an increase in employment growth. The unemployment rate rose to 5.7 percent in the first quarter, from a revised 5.4 percent three months earlier, Statistics New Zealand said. The labour force increased by 38,000, or 1.5 percent, the largest increase since December 2004.

SF Fed dove Williams expects the Fed to gradually raise rates over the next couple of years and he agreed with the decision not to raise rates yet this year. He is forecasting 2% GDP growth this year, but needs to see inflation pick up or continued progress on the economy to hike in June. He is supposed to be speaking from a panel on systemic risk from Los Angeles later and his remarks are being picked up Bloomberg Radio. He has leaned toward the hawkishly patient side this year and this fits that profile.

BoC Governor Poloz said yesterday in a panel discussion that low interest rates mean less impact from rate moves. International performance divergence causes volatile foreign exchange. The U.S. economy is in a sweet spot for growth. The time it takes before inflation kick in is an open question, he said. The federal budget is expansionary. The Governor is taking part in a panel discussion.

Main Macro Events Today

• The ECB Non-Monetary Policy Meeting:  The ECB Governing council will meet today but no monetary policy will discussed in this Non-monetary policy ECB meeting. The European Central Bank (ECB) announced in July last year that the Governing Council meetings dedicated to monetary policy will change to a new six-week cycle, from January 2015. Non-monetary policy meetings will continue to be held at least once a month.

• US ADP Unemployment change: The unofficial ADP unemployment report for April is due today. No major change is expected with consensus expectation being at 196K while the previous survey reported 200K new jobs.

• US Non-Manufacturing ISM: The ISM-NMI is out on Wednesday and should hold steady at 54.5 (median 54.1) from last month. The ISM for the month declined to 50.8 from 51.8. Broadly speaking, producer sentiment has eased to still firm levels in April after a surge in March. We expect the ISM-adjusted average of all measures to dip back to 51 for April from 53 in March and 49 in both February and January. This could spell some downside risk to the release

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FOREX News Today

German retail sales unexpectedly dropped 1.1% m/m in March. Expectations had been for a rebound from the initially reported decline in February, but even if last month’s number was revised up to 0.0% m/m from -0.4% m/m, it still means the correction in March was a surprise and disappointment. Retail sales cover only part of overall consumption and the most recent confidence numbers, which show a marked improvement in the willingness to spend suggest consumption will continue to underpin overall economic activity, but the data nevertheless suggest a downside risk to Q1 GDP numbers.

French Q1 GDP came in at 0.5% q/q, up from 0.3% q/q in Q4 last year thanks to a sharp pick up in consumption which expanded 1.2% q/q. It is difficult to say how much of this is due to the Easter effect, with the early timing of the holiday likely to have inflated the consumption number, but also translating into less hours worked. Import growth slowed markedly, while exports contracted -0.2% q/q. Gross fixed capital formation rose 0.9% q/q, a further acceleration from the 0.7% q/q in Q4 last year, which is encouraging. The annual rate still fell back though to 1.3% from 1.4% and while data confirms that the economy continued to expand in the first quarter, confidence indicators already point to a slowdown in the second quarter, so even if the better than expected French number leaves some upside risk for the Eurozone data later on, the backward looking numbers won’t change the ECB policy for now.

The Eurozone and Brexit Risks: Brexit concerns may have receded somewhat as warnings over the consequences for the U.K. are getting louder. However, while the direct economic impact of an exit from the European Union may be bigger for the U.K. than for the EU, the damage such a step could do to confidence not just into the EU, but also the single monetary union, should not be underestimated. Anti-establishment forces are gaining strength as the debate over the costs and benefits of closer cooperation intensifies and a reform-push is needed to keep the project of ever closer cooperation in Europe on track. Ultimately though, this will be easier within the union than from an outsider position.

 

Main Macro Events Today

• Euro Area GDP:  Eurozone Q1 GDP releases kick off with France and Spain early in the session, followed by overall Eurozone numbers later on. We expect broadly stable quarterly growth rates of 0.3% q/q in France and 0.7% in Spain, with the latter marginally down from the 0.8% q/q in Q4 last year. Italy and Germany only release numbers later in the month, but the preliminary overall Eurozone rate is also likely to be 0.3% q/q, unchanged from Q4 last year.

• Euro Area HICP: We have lowered our forecast for Eurozone April HICP inflation to -0.2% y/y from -0.1% y/y after the weaker than expected German and Spanish numbers. The drop back into negative territory is not really a surprise and was already flagged by Bundesbank and ECB officials ahead of the releases, so that in itself the data won’t change the policy outlook. Officials are still expecting headline rates to pick gradually later in the year, but will keep a close eye on developments in the exchange rate as well as oil prices ahead of the next forecast revisions in June.

• Canada GDP: We expect GDP to fall 0.2% in February (median same at -0.2%) after the 0.6% surge in January. The components that underpin the February GDP estimate were mixed, but with a negative bent. We anticipate a 2.5% Q1 GDP performance that will be in the ballpark of the BoC’s 2.8% estimate from the April MPR.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.