Simon Smith

EUR down on Draghi

Markets getting their Friday sugar rush thanks to ECB President Draghi. Back in 2012 he said he would do "whatever it takes" to save the euro, in relation to the sovereign crisis that was enveloping several countries. Now he said that "We will do what we must" to raise inflation and inflation expectations. This could become the new mantra. Back in 2012, the beauty of Draghi's remarks was that the ECB did not have to do anything else to follow through. This time around, they don't have the ...

Simon Smith

Some UK MPC members still voting for higher rates

Sterling back up to 1.5650 after BoE minutes show 2 members still dissenting in favour of higher rates. This is despite the chance in tone in the latest Inflation Report and deterioration in the global economy since August, when both started dissenting in favour of tightening. The spread of views on the committee is wider than anticipated, the doves worried that any tightening could well have to be reversed given current inflation trends. The hawks take the view that the amount of slack in the ...

Simon Smith

Labour market data

Sterling slightly firmer after latest labour market data, which showed the rate steady at 6.0%, with increase in wages slightly more than expected at 1.0% on headline (3M Y/Y measure) and 1.3% on underlying measure. The market awaits the Inflation Report at 10:30 GMT, which is expected to be more on the dovish side, especially in relation to sentiment mid-year when Carney was suggesting market was under-estimating the risk of a rate increase this year.

Simon Smith

USDJPY above 116.00

USDJPY above 116.00 as yen weakness from Asia session continues through European trade. EURJPY at 143.85, just shy of high seen post-ECB last Thursday. As mentioned in Daily, we're in a renewed period of yen weakness, which could well have further to run.

Simon Smith

Dollar reaction after payrolls

US employment report weaker on headline reading, but upward revisions to previous months and fall in unemployment rate (down to 5.8%) has seen some buyers into the initial dollar weakness and market currently struggling to decide how to take this report. USDJPY below 115.00, with EURUSD struggling to hold above the 115.00 level.

Simon Smith

EUR lower at start of press conference

EUR down to low of 1.2406 after ECB's Draghi comments, down 1 big figure, but has since managed to recovery. Council said to be unanimous on further easing measures if needed.

Simon Smith

European dollar gains

European currencies, sterling in particular, were already coming under pressure ahead of the European session, with the subsequent data enhancing the trend and pushing cable more than 1 big figure lower on the day to below 1.59. The weaker services PMI data provided the impetus to the renewed push lower, dragging EURUSD to below the 1.25 level. A

Simon Smith

Cable above 1.60

Cable nudging back above the 1.60 level after the latest manufacturing PMI data, which showed the headline rate rising to 53.2, from 51.4. This is first release for October and there were concerns that the economy would slow after the recent strong pace of growth.

Angus Campbell

US consumer confidence smashes expectations

US consumer confidence came in at 94.5 well ahead of expectations of a decline from 89.0 to 87.0. This is giving the dollar a like help, lifting it off its session lows having been drifting lower following the poor durable goods data earlier. The most impressive thing about this figure is that it shows US consumers have not yet had their confidence dented from the Ebola scares and could draw a line under the recent dollar weakness, especially since the Jobs Plentiful / Hard-to-Get data was also ...

Simon Smith

UK GDP in line

UK GDP rose 0.7% QoQ in Q3, in line with expectation. Cable has popped higher by around 20 pips to 1.6050, just on short-covering and the fact that support at 1.60 now looks a little safer now near-term risk has been removed.

Simon Smith

GBO softer after sales data

GBP sitting above 1.6000 after softer than expected retail sales data for September. Both headline and underlying measures fell 0.3%, coming on the back of MPC minutes yesterday which were more cautious on the global economy overall. We've also seen a mixed picture in terms of eurozone data, with better German PMI data contrasting with weaker numbers from France. EURUSD remains in trapped in a tight range for now though.

Simon Smith

Dollar in retreat again

The US retail sales data has seen the dollar weaken, with EURUSD back above 1.27 and USDJPY at the week's lows of 106.57. Headlines sales fell 0.3%, with PPI data also slightly softer than expected. We've seen a big shift in the past two weeks as markets become more concerned regarding the global growth outlook, as seen in both the US 2Y yield and also oil prices.

Angus Campbell

GBPUSD gets dumped after lower than expected inflation

GBPUSD has crashed back below the 1.6000 level now trading at 1.5975 following much lower than expected CPI data. This shows the impact that lower oil prices is having on inflation and has even caught the most bearish of estimates off guard. This will only serve to push Bank of England rate hikes expectations even further out into 2015 and it likely to keep sterling under pressure going for the remainder of 2014. The only good thing to come from this is that tomorrow's earnings data, which is ...

Simon Smith

EUR and GBP weaker on activity surveys

The latest PMI data has shown a slowing picture of activity. Most notably for Germany, the manufacturing series was revised lower to 49.9 (from 50.3), this coming ahead of the ECB tomorrow and has aided a push below the 1.26 level on EURUSD. Cable is down to 1.6170 after UK numbers were weaker than expected. But the dollar weakness is becoming a well worn story and there is still an underlying current towards corrective activity on some of the majors because of this.

Angus Campbell

US GDP revised higher, in line with expectations

So annualised US GDP has been revised higher to 4.6% for Q2. This was bang on market expectations and the reaction from the dollar has been muted. There is however a tinge of dollar strength following the release as looking deeper into the numbers you can see that there are elements that show the US economy continues to gather pace. Corporate profits for example are the highest they've been since the third quarter of 2010, so we're just seeing EURUSD drift down to 1.2720, GBPUSD to 1.6295 and ...

Simon Smith

Weaker German IFO adds to core slowdown story

The headline Ifo index was weaker than expected at 104.7 (from 106.3), with the underlying expectations balance leading the way lower. EURUSD reaction was limited to within 10 pips on EURUSD, but in the bigger picture the slowdown story in the core countries is becoming stronger and more sustained.