Forex trading headlines from the European morning session 14 May
News:
- BOE Quarterly Inflation Report: Sees slower productivity growth than in Feb
- BOE’s Bean: Average policy rates will be below pre-crisis levels for all advanced economies
- Forward guidance has moved into second phase – Carney
- BOE will largely look through impact of recent sterling appreciation
- Carney: Escape velocity is when growth is sustained and balanced
- Carney: Does not want to validate any market rate curves
- Growth and inflation expectations little changed since Feb says Carney
- ECB’s Praet says negative depo rates are a possible part of a combination of measures
- ECB’s Mersch says mandate allows possibility of buying govt bonds on seconday market
- ECB’s Mersch: We never precommit unconditionally
- ECB sources say they are preparing a package of policy options for June meeting
- Spanish bond yields have further to fall says Latorre
- Pfizer boss back in front of UK MPs today
Data:
- April UK claimant count -25.1k vs -30.0k exp
- German CPI April final m/m -0.2% vs -0.2% exp/prev
- French CPI (EU-norm) April final m/m 0.0% vs +0.1% exp
- March Eurozone industrial production -0.3% vs -0.3% exp m/m
- Spanish CPI April final m/m +0.9% as exp
- Swiss ZEW investor sentiment May 7.4 vs 10.0 exp
- Nikkei closes down 0.14% at 14,405.76
- Shanghai Composite Index closes down 0.14% at 2047.91
The UK jobs data and BOE inflation report were always going to liven things up this morning and they didn’t disappoint as GBP longs were forced to run for cover.
GBPUSD had started perkily enough rising from 1.6850 to 1.6873 with EURGBP languishing down at 0.8130 but all that changed as a weaker than expected claimant count pushed prices to 1.6825 from 1.6860 and 0.8150 from 0.8127.Then the pound was slapped again to 1.6760 and 0.8184 as the BOE inflation report failed to deliver any urgency into the rate hike scheduled for next year with many GBP longs having bought on expectation that they would suggest a lean more toward Q1
The pound has suffered across the board with GBPJPY also being a prime mover to 170.65 from 171.85 after the report, GBPCHF down to 1.4905 from 1.5004 and GBPAUD continuing its move lower to 1.7830.
Other core pairs have had varied action aside from the GBP cross plays. EURUSD had a little run to 1.3730 but has since drifted back to 1.3710 while USDJPY had a run down 101.95 from 102.10 just prior to the UK jobs data and then further on the GBPJPY selling to 101.73.
AUDUSD has drifted off a tad from 0.9396 while AUDNZD selling has seen the kiwi rally to 0.8667. USDCAD has found the bids at 1.0885 enough to stop the retreat from another failure to breach 1.0925-30 o/n.
So now we wait to see whether the pound has a follow-through sell or finds a bit more love from across the pond than it’s found here so far.
