Market Brief: Mario Draghi to stir things up early?
23 Aug 2017
Tuesday morning began with UK public finance figures performing better than expected in July. The headline borrowing measure, the PSNBX, was recorded £0.2bn in surplus. Consensus had been for a £1.0bn deficit (Investec forecast +£0.2bn) whilst revisions to the June data were also positive (i.e. reduced earlier estimates of the deficit in that month).
Latest rates | Today's data release | ||||||
---|---|---|---|---|---|---|---|
GBP/USD | GBP/EUR | GBP/AUD | GBP/AUD | GBP/CHF | 09:00 | EU current account | |
1.2894 | 1.0973 | 1.6301 | 1.6302 | 1.2415 | 10:00 | EU construction output | |
GBP/JPY | GBP/HKD | GBP/ZAR | EUR/USD | EUR/GBP | 15:00 | US Michigan sentiment | |
140.59 | 10.0882 | 17.0418 | 1.1748 | 0.9111 | |||
Investec currency forecasts as at 27 July 2017 | Key levels | ||||||
Q3 '17 | Q4 '17 | Q1 '18 | Q2 '18 | Support | Resistance | ||
GBP/USD |
1.29 | 1.30 | 1.30 | 1.31 | 1.2820 | 1.3030 | |
GBP/EUR | 1.13 | 1.14 | 1.13 | 1.13 | 1.0930 | 1.1020 |
Market overview
The better than expected figures were helped on their way by the lowest year over year rise in central government current spending since March whilst current receipts (excluding BoE asset purchase coupon flows) held up well enough too. Overall, a pretty decent reading, despite the soggy economic backdrop.
There was a risk-off feeling overnight with JPY higher as Donald Trump said he may end the North American Free Trade Agreement. He also threatened to shut down the US government if he is unable to get funds to build a wall along the Mexican border. Yesterday market sentiment had rebounded, perhaps in some ways linked to reports that the Trump administration may be finding common ground with lawmakers on how best to pursue tax reform.
Prime Minister Theresa May conceded that European Union law will influence the UK long after Brexit, in a bid to speed up talks. French President Emmanuel Macron has begun an EU tour aiming to curb cheap labour and reshape defence and border controls. Tuesday afternoon’s session saw weakness for the GBP as it continued its slump against the Euro. We currently sit on the 1.09 level with is an 8 year low for the currency pair.
There was a risk-off feeling overnight with JPY higher as Donald Trump said he may end the North American Free Trade Agreement. He also threatened to shut down the US government if he is unable to get funds to build a wall along the Mexican border. Yesterday market sentiment had rebounded, perhaps in some ways linked to reports that the Trump administration may be finding common ground with lawmakers on how best to pursue tax reform.
Prime Minister Theresa May conceded that European Union law will influence the UK long after Brexit, in a bid to speed up talks. French President Emmanuel Macron has begun an EU tour aiming to curb cheap labour and reshape defence and border controls. Tuesday afternoon’s session saw weakness for the GBP as it continued its slump against the Euro. We currently sit on the 1.09 level with is an 8 year low for the currency pair.