A Light Global Economic Calendar Day
The CBI industrial trends survey on factory orders for April will mark the start of this week’s domestic economic releases. The survey will be used to gauge the outlook for the nation’s manufacturing sector, ahead of Friday’s manufacturing PMI print for the same month. Meanwhile, tomorrow’s preliminary GDP data is expected to show a sluggish growth in the economy for the first quarter of this year.
Across the Atlantic, market participants will keep a tab on the flash Markit services PMI for April, scheduled later today. Moving ahead, investors’ focus will shift towards the initial estimate of GDP data for the first quarter in the US, due on Wednesday.
Pound Sterling – UK Markets
The Pound is trading on a weaker footing against the US Dollar this morning, amid a light economic calendar day in the UK. There are several influential domestic data publications scheduled during the week, but the focus among Sterling investors is likely to be on any developments or debate between political parties ahead of the general election in the UK. In macro news, today’s CBI survey on the nation’s industrial orders for April will attract some attention. Previously, the index for March had deteriorated to the lowest level in five months and dampened optimism over the nation’s economic outlook. Today’s release will help investors to gauge if there is any improvement in the health of the nation’s manufacturing sector. Going forward, Britain’s initial estimate of GDP growth, due tomorrow, will be in focus, especially considering that recent economic data releases mostly point towards a slow pace of growth for the first quarter.
The Pound remained in a tight range against the Euro on Friday, amid a quiet day in terms of economic releases in the UK.
US Dollar – US Markets
The US Dollar is trading higher against the Euro this morning, ahead of the release of the preliminary print of Markit services PMI for April in the US. Market participants expect the services PMI reading to edge down slightly, adding to further evidence that the US economy is losing some momentum. A number of key economic releases are scheduled this week, including reports on manufacturing, housing and consumer sentiment. This data will provide the first indication of the health of the nation’s economy at the start for the second quarter. However, the first print of GDP for the first quarter and the FOMC interest rate decision, due later this week, will attract maximum attention among investors.
The US Dollar traded on a weaker footing against the single currency on Friday, after a decline in March’s durable goods orders, excluding the transport sector, signalled that businesses were not confident in their investment plans in the face of a softening US economy. However, a surge in demand for aircraft and defence goods pushed headline orders to post the biggest gain in eight months.
Euro – European Markets
On Friday, the Euro nudged lower against the Pound, after Euro zone finance ministers in a meeting held in Riga warned that Greece will not be given more aid until it meet its bailout terms. The Euro is expected to remain under pressure as the debt burdened nation looks for ways to meet its May end debt repayments. In economic news, the German Ifo survey showed that its current assessment and business climate indices climbed higher than market expectations for April, indicating that sentiment among German businesses remains upbeat, largely supported by stimulus measures and a favourable exchange rate.
The Euro is trading lower against the greenback this morning. Data released earlier in the day showed that Germany’s import prices for March declined, but at a slower than expected pace, as commodity prices continued to remain low. Moving ahead, Euro zone’s preliminary consumer price inflation for April, due later this week, will be noted to gauge the extent to which deflationary forces remain a concern for the region.
Other Currencies – Highlights
The Canadian Dollar edged slightly higher against the US Dollar on Friday, as mixed US durable goods orders report failed to bolster confidence among investors concerned about the nation’s slower pace of economic growth. In a speech last week, the BoC Governor, Stephen Poloz, gave a more upbeat assessment of the Canadian economy, as he mentioned that the damage from falling oil prices will stop impacting the economy from the second quarter of this year. He stated that the central bank expects the Canadian economy to grow at 1.8% for the second quarter and by 2.8% for the third quarter. He also added that demand for Canadian exports would increase in the coming months, as he expressed optimism about growth in the US, the nation’s main trading partner.
In the absence of fresh economic news in Canada today, investors will shift their focus to the release of the nation’s GDP growth for February, scheduled later this week, especially after GDP recorded a drop for the previous month.