12/ 03/ 2019

UK Brexit Votes to put the US Data in the shade

The euro traded uneventfully throughout Monday, as market's attention was centered on Brexit headlines. News related to the UK departure from the EU started early Asia and triggered a bout of dollar's buying, which produce gaps of different extent in benefit of safe-haven currencies.

Looking ahead, today's focus will start with a Fed's Chief Powell speech, although it seems unlikely he would add much to his weekly comments, dollar positive as he said that the US economy is still strong, The US will also release its February inflation figures, any deviation may impact the Fed’s “patience”.

The UK government is set to bring an amended Brexit deal to vote today, and it is expected to fail once again. It will be then followed by a vote on a no deal Brexit on March 13th, which is expected to result in Parliament rejecting an exit without an accord. The last vote comes on March 15th, when Parliament is due to instruct the government to seek an extension, probably of three months. The expected delay of Brexit sent the pound higher, but it then retreated as nothing is certain. Theresa May most likely announce she has no new deal to offer. In addition, the House of Commons could also surprise with a vote in favor of leaving without a deal, a move that will likely devastate the pound.

11/ 03/ 2019

Week Ahead | Key Brexit Votes, US CPI & Fed Chair Powell in Focus

Looking through all the financial market news last week, the message was rather unified. That is, 2019 will be a year of slowdown, globally. Economic data, central banks, governments and independent organizations are all reinforcing this message. While ECB’s “pre-emptive” dovish turn triggered wild market reactions, it was just the nail for the case. The question now is whether the markets are pessimistic enough on the outlook.

Sterling fell on Friday in a volatile session as British Prime Minister Theresa May urged the European Union to make “just one more push” to break the deadlock over Brexit by offering her changes to a deal. The scale is skewed in favor of the greenback, with multiple US figures scheduled for next week to determine whether dollar's strength is set to continue in the longer run, starting with Retail Sales on Monday and CPI data on Tuesday. The EU macroeconomic calendar has little of relevance to offer until next Friday when the Union will unveil CPI figures.There's a couple of political factors that have yet to be resolved and could affect these two currencies. China-US trade talks are making 'progress' according to both parts, but there's no agreement yet. 

It’s another big week ahead. More data out of China could rile the markets, with Brexit, the BoJ and a busy economic calendar to keep things interesting.

07/ 03/ 2019

All Eyes on Draghi and Euro is under pressure ahead of ECB Monetary Policy Meeting

Asian markets are mixed today despite selloff in US overnight.

Global analysts believe that Sterling could drop by nearly 9% if there is a no deal Brexit or otherwise if the Brexit Negotiations go well it could surge up to 6% upwards in a year’s time.

Likely offering some support for sterling, the Bank of England is expected to raise borrowing costs towards the end of this year.

US ADP Change & Trade Balance both reflected negative against the prior months. Basically giving us an indication that China & US Trade Talks are yet not effectively changing their Economic Outlook.

Asian shares eased on Thursday early session, with caution prevailing as investors awaited some kind of resolution to Sino-U.S. trade negotiations, while the euro remained under pressure ahead of the European Central Bank meeting & U.S Initial Jobless Claims.

06/ 03/ 2019

Dollar prevails against Rivals while Markets remain anxious about NFP & ECB

The dollar held gains against its peers on Tuesday & early today, buoyed by better-than-expected data, the euro was down by a level, hovering near two-week lows versus the greenback amid bets that the European Central Bank meeting on Thursday would indicate a delay in raising rates until next year and the ECB will soon re-launch long-term bank loans to fight an economic slowdown. Sterling pound dropped yesterday late session due to anticipation that Bank of England is preparing for Non-Agreement Exit plan for the EU.

Looking ahead of the day, heading into the European open, markets eagerly await the outcome of the further Brexit negotiations between Britain’s top government officials and the European Union (EU) Chief Brexit Negotiator Barnier, as both the sides try the last effort to clinch a Brexit deal. The FX space will be driven by Brexit updates, USD dynamics and the sentiment on the European equities amid a data-dry EUR calendar. However, the speech by the BOE MPC member Cunliffe’s speech will be eyed later today with the US ADP jobs report will hog the limelight pre-US open , soon followed by the US and Canadian trade data releases Bank of Canada (BOC) rate decision.