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Quiet data day leaves market to focus on Brexit and upcoming UK GDP estimates

business-articlesQuiet data day leaves market to focus on Brexit and upcoming UK GDP estimates
  • Brexit negotiations and Friday’s UK GDP reading
  • US mortgage applications
  • French initial jobless claims
Brexit negotiations make headlines once again – what can we expect for pound (GBP) exchange rates?

With very little going on today on the UK’s data calendar the market focus will likely shift to Friday’s upcoming UK GDP estimate for Q1 2018 and the latest on the Brexit negotiation front.

Sterling has spent this week being relatively resilient in the face of Brexit-related soundbites, with EU Chief Negotiator Michel Barnier’s latest calls for ‘more clarity’ and general concerns regarding the Irish border conundrum having had little-to-no effect yesterday.

In other news, the outlook for Sterling seems only to have grown thanks to the latest public sector borrowing figures, with the Office for National Statistics (ONS) reporting that government borrowing had dropped to its lowest level in over a decade.

Friday could see significant volatility, however, with analysts concerned that the UK’s GDP growth readings for Q1 2018 might have been hit by severe weather, particularly with the UK’s struggling services sector making up near 80% of GDP.

Markets will be keen to assess the GDP results as they could provide a better indication of the Bank of England’s (BoE) monetary policy trajectory for the rest of this year.

US data calendar quiet until Thursday’s trade balance and Friday’s GDP

Again, today is a quiet one for US data, with the only potential market mover being the US mortgage application figures for April.

The number of mortgage applications in the US is expected to have risen by only 0.16% over this period - a far sight from the previous period’s score of 4.9%.

Whilst this is a lower-tier data release, a marked fall would still bode poorly for the US economy.

In other news, Thursday’s advance goods trade balance and Friday’s Q1 GDP readings will both be primary movers this week for the ‘Greenback’, with upbeat readings liable to keep the US Dollar afloat and ensure the US Federal Reserve is on track for an aggressive cycle of rate hikes in 2018.

French initial jobless claims liable to influence euro (EUR) exchange rates

For the bloc, markets are largely holding their breath for Thursday’s European Central Bank (ECB) rate decision, but in the meantime the French jobless claims readings could cause some movement.

Markets currently expect the number of people registered as out of work in mainland France to rise by 15.2k in March, a large shift compared to the previous period’s fall of -40.2k.

Unemployment in France continues to remain worryingly high, with the last reading printing at 8.9%.
If the number of jobless claims increases then it would bode ill for the French economy, but it is unlikely to have any influence on tomorrow’s rate decision.

Upcoming data:

Wednesday 25 April
05:30 JPY JP All Industrial Activity Index (February)
11:00 EUR FR Unemployment Benefit Claims (March)
12:00 USD US Mortgage Applications (April)
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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