What’s been happening?

UK: Although data showed that house prices have fallen sharply in London, the pound has continued to rally against both the euro and USD breaking out of recent restrictive ranges. The 3.2% drop between Jan – Mar this year didn’t really dent the pound as both David Davis (Brexit Minister) and the Institute of Directors (IoD) made positive comments to propel the pound. Traders have been buying the pound ahead of key data releases next week and with Brexit talks resuming. An IoD report has suggested that not is as gloomy as once thought regarding the UK economy with 700 company directors being polled finding renewed optimism.

EU: Not a good day for the euro yesterday. The ECB minutes included a rather dovish tone to them and the ECB suggested that the removal of QE should not be misunderstood. They also showed economic growth hand slow in the EU in first quarter and that they have concerns about the strength in the euro exchange rate. All this did was cause the euro to back-peddle and break out into a new range. The ECB also revised down their inflation forecast and now expect to push back the date to end their QE programme 

US: President Trump loves Twitter. According to a little bird there is renewed optimism about avoiding a trade war with China, but more details on tariffs will come next week. President Trump also tweeted that an “attack in Syria could come very soon or not at all.” Equity markets rallied on the back of this.

What’s coming up?

UK: It’s quiet in terms of data from the UK today, but markets are preparing for a big week ahead post counting your winnings from the Grand national. GBP is certainly appreciating against both the euro and the dollar at present, but when will this rally stop? Those that have exposures to these currencies would do well to take some risk off the table ahead of any potential reversal. The big figures out of the UK next week will be unemployment on Tuesday and CPI the day after. Be mindful that Brexit talks start again, and the market will keep its eye on whether a trade agreement can be formed.

US: Fed Bullard speaks later today at 14:00 and we also have US Michigan Consumer and Inflation Expectations. 

EU: All quiet on the euro front regarding data today. Tuesday will see the release of German ZEW (business confidence) and it will need a strong posting to holt further euro punishment.


Most Asian stock markets closed in positive territory following gains on Wall Street. The jump higher was attributed to the renewed hope that trouble between the US and Syria have eased. Chinese data was very mixed with stocks falling after weak export data, but imports out performed expectations. The Australian dollar has struggled overnight against the dollar is trying to recover following RBA governor Philip Low’s comments earlier in the week about concerns regarding the global economic environment. The Aussie continued to fall yesterday against the pound on positive news all round for the UK and concerns made by governor Low.