FOREX News Today

European Outlook: Risk aversion is picking up, with stock markets continuing to head south in Asia, oil prices down and save haven assets rising. The EUR is little changed against the dollar. However, European bond futures failed to get support from rising risk aversion and a broad decline in stock markets yesterday so weak leads won’t necessarily translate into a drop in yields early in the session, especially if German data at the start is hawkish. The data calendar is very busy see below for German figures on GDP and CPI. Italy also has preliminary Q1 GDP and there are final inflation numbers from  Spain and Italy as well as French payrolls data.

German  GDP and CPI: The German economy gained pace at the start of this year. In the first quarter of 2016, the gross domestic product (GDP) rose 0.7% on the fourth quarter of 2015 after adjustment for price, seasonal and calendar variations. GDP numbers are stronger than expected, the strong expansion is unlikely to be sustained in the second quarter and the risks to the medium term outlook remain tilted to the downside. Still, for now the numbers back the ECB’s wait and see stance. Consumer prices in Germany fell by 0.1% in April 2016 compared with April 2015. The inflation rate – measured by the consumer price index – thus decreased, following a slight increase in the previous month. A negative rate had last been recorded in January 2015 (–0.3%). Compared with March 2016, the consumer price index fell by 0.4% in April.

BoE Warns Brexit would Lower Growth and Lift Inflation: The BoE once again voted unanimously to keep rates on hold today, as widely expected. The uncertainty ahead of the Brexit referendum on June 23 is now clearly having an impact and the inflation report lowered the expected growth trajectory even though it is based on the assumption that the U.K. will remain in the EU. At the same time the MPC stated very clearly that a a vote to leave the EU would lead to lower growth and higher inflation. The implication for the monetary policy outlook in such a scenario may be ambiguous, but the comments very clearly provide further ammunition to the “remain” camp in the run-up to the referendum.

Fedspeak: George (known hawk) said rates are too low for current conditions, in her speech on “Longer-Term Labor Market Trends, the Economic Outlook and Monetary Policy.” Boston Fed’s Rosengren warned risk of a hike is bigger than markets think. Cleveland Fed’s Mester (hawk): risks around Fed forecasts shouldn’t paralyze policymakers, and oil prices and the dollar have partly stabilized recently.

Main Macro Events Today

• US Retail Sales: April retail sales are out on later today and should reveal a 0.6% (median 0.8%) headline with the ex-autos figure up 0.4% (median 0.4%) for the month. This follows March figures which had retail sales down 0.3% and ex-autos up 0.2%. The outlook for the release looks promising as vehicle sales rebounded to a 17.3 mln clip for the month alongside continued strength in construction employment which could help lift building material sales.

• US PPI: April PPI is out today and should reveal a 0.4% (median 0.3%) headline with a 0.1% (median 0.1%) core increase for the month. The March headline was -0.1% as was the core and inflation measures had been struggling to post gains alongside the renewed downturn in oil prices that we saw over the winter. Oil prices remain depressed but there was some rebound in April which could help lift the PPI.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

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.

FOREX News Today

European Outlook: Higher oil prices and a weaker yen competed with disappointing earnings results in Japan and the U.S. and left Asian stock markets struggling and swinging between gains and losses. U.S. stock futures are higher but FTSE 100 futures are down ahead of the BoE announcement, which is not expected to bring a change in policy, but will be closely watched for dovish signs in the minutes and especially the quarterly inflation report. Mixed leads then for European bond futures, which closed narrowly mixed yesterday, as a reversal of intra-Eurozone safe haven flows weighed on Bund futures. The European calendar also has final French inflation data and Eurozone production numbers.

BoJ Governor Kuroda: Talked up room for easing substantially, if necessary, in a Boersen-Zeitung interview reported yesterday, warning that the BoJ has “certainly not” run out of ammunition. He suggested that a little patience may be required, but the positive inflation trend is absolutely intact. “The quantitative easing, the qualitative easing, the negative interest rate — these are the three dimensions where we can act,” he said. USDJPY has rallied from an overnight low of 108.28 and is currently trading at 108.92, in an attempt to retake 109.00.

Canada’s GDP Outlook Cut Due to Halt in Oil Production: Canada’s Q2 growth outlook has been sharply reduced due to the Fort McMurray wildfire that stopped oil production in the area. We have cut our projection for real Q2 GDP to flat (0.0%) from 1.5%. But we have boosted our Q3 GDP estimate to 2.4% from 1.8% amid the projected return in oil production and rebuilding in the area. Growth for 2016 has been cut to 1.6% from 1.7%, putting growth below the BoC’s 1.7% estimate. But given that the economic impact of the fire is temporary, the events should not sway Bank of Canada policy.

Main Macro Events Today

• UK BOE Announcements:  A no-change stance by unanimous vote is all but certain as the Old Lady has said that it will refrain from changing policy pending the outcome of the Jun-23 referendum on EU membership. Given the evident deceleration in growth momentum in the UK economy, the minutes are likely to show an uptick in dovish language. However, the focus will be on the updated set of forecasts in the quarterly inflation report although will polls still suggesting a very tight decision any forecasts ahead of the referendum will be subject to high uncertainty and greater error margins.

• US Import/Export Prices: April trade price data is out later today and we expect to see some increase with a 0.7% (median 0.6%) import price figure and a 0.2% increase for export prices. This follows respective March figures which had import prices up 0.2% and export prices unchanged. The plunge in oil prices that resumed last fall had helped to keep the headline figures negative but with oil prices rebounding we expect to see a subsequent recovery in the trade price indexes.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

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.