Global Trade Tensions adds up while Brexit summit is around the corner

Daily Update - 10th April 2019

Yesterday’s Market

• AUD Home loans
• CHF Unemployment rate

Yesterday’s Explained

The Home Loans released indicated a positive surge in the number of home loans. It indicates the housing market trend in Australia has strengthen and a level of consumer confidence as large housing loans are taken out.CHF Unemployment Rate was released and it indicates a lack of expansion within the Swiss labor market.

 

Today’s Market

• ECB Interest rate decision and statement
• USD consumer price index & FOMC minutes

Today’s Focus

For the EUR, while there are no material stats scheduled for release later this morning, it’s a big day for the EUR. The ECB will deliver is April policy decision and also hold the all-important press conference. While there are no expectations that the ECB will make a move later today, forward guidance will be key. Economic data out of the Eurozone has continued to disappoint, which will have added more pressure on the ECB to act. U.S – China trade talks have progressed, but tariffs remain and the threat of tariffs on the EU have resurfaced. To add fuel to the fire, the IMF also cut the Eurozone’s growth forecast from 1.6% to 1.3% on Tuesday.

It's’s a big day for the Pound. On the economic data front, key stats due out of the UK include GDP, industrial and manufacturing production and trade data. While we would traditionally see the Pound respond to the GDP and manufacturing production figures, Brexit could overshadow the numbers on the day.

Across the Pond, March inflation figures are due out of the U.S this afternoon. With the markets not expecting the FED to actually cut rates later on in the year. A jump in inflation could have a material impact on the Dollar. Based on forecasts, there would be little reason for the FED to shift from its March projections so soon, however. Later on the session, the FOMC meeting minutes are due out that will likely shed some more color on the FED’s intentions, vis-à-vis interest rates, and balance sheet through the 2nd half of the year. Ahead of the FOMC meeting minutes and inflation figures, FED Chair Powell is scheduled to speak and could ultimately overshadow the meeting minutes if there’s any policy chatter that falls outside of market expectations. Status quo and the spoils could likely go to the EUR, barring any surprise move by the ECB.