Today's data releases
 Key levels
08.15US Fed Chair Jerome Powell speaks Support
08.30UK Halifax house prices
19.00US President Trump speaksGBP/EUR

Market overview

What a weekend just gone – sport, sunshine, and a shandy or two. In market news, though it feels like a lifetime ago, we need to cast our mind back to Friday afternoon when we had the release of the ever important US non-farm payrolls figures and previous months’ revisions. The non-farm payroll gain was smaller than expected with a 164k rise in April, whilst market expectations had been for +192k and our own forecast for +200k. Net revisions to payrolls were however positive with jobs gains for the past two months pushed up by 30k. Overall though the softening in payroll gain readings from those seen earlier in the year, could well add to debate over whether the pace of US labour market tightening is starting to ease up from the more robust gains seen from October through to February. The unemployment rate did however drop to its lowest level since December 2000 at 3.9%, whilst consensus expectations had been for a smaller fall from 4.1% to 4.0%. However pay growth still shows any lack of upward momentum, with hourly earnings just 2.6% higher than year ago levels and unchanged from the March reading. The lack of upward momentum in pay growth reinforces the prospect that the Fed can move gradually on policy tightening, as it indeed its Wednesday policy statement indicated it would.


Yesterday was relatively quiet with German factory orders and the European Sentix Investor Confidence indicator coming in below expectations, helping to put further pressure on the euro. Elsewhere in Europe, ECB governing council member Jan Smets said the bank is likely to phase out its bond-buying program over the summer, possibly announcing a decision after its July 26 policy meeting. In other news yesterday we saw WTI crude oil rise past $70 a barrel for the first time since December 2014, on speculation the U.S. would pull out of the Iran nuclear accord. Finally in the land of Brexit, Boris Johnson has exposed the British cabinet’s divisions over post-Brexit customs policy. The foreign minister criticised Theresa May’s preferred policy — the customs partnership — as a “crazy system” that would leave the UK “locked in the tractor beam of Brussels”.

The day ahead

Looking ahead today, we get UK Halifax House Price data at 0830, the Australian budget at 1030, and President Trump speaks at 1900 likely giving us his decision on if the US will remain in the Iran deal. Though it is speculated that he will pull out of the deal, Iran’s President Hassan Rouhani has signalled that his country may in the accord if certain demands are met. The Fed’s Jerome Powell is also speaking as we go to press so do keep a look for any headlines off the back of it. For the rest of the week we have the latest policy decision from the Reserve Bank of New Zealand at 2200 Wednesday, the Bank of England’s latest policy decision at 1200 on Thursday, and then US inflation data at 1330 on Thursday. With regards to the Bank of England decision, it is a significant meeting as the quarterly Inflation Report (IR) is also due, in which the committee will outline its latest inflation and other economic forecasts. At the moment, the market likelihood of a hike is at 11% with the next hike just about priced in for August. Enjoy what remains of the sunshine and have a great short week.

Thought of the day

If you’re anything like me, and have just spent the last 3 days basking in the sun, beer in hand (those that know me will say more like a lime and soda); you could be forgiven for feeling slightly more dejected than usual this morning, especially as the sun continues to shine outside. This weekend, us Brits enjoyed the hottest early May Bank Holiday Monday ever recorded. According to the Met Office temperatures in Northolt, west London, reached 28.7C (83.6F) smashing the Monday record before beating the overall record set in 1995 when temperatures peaked on the Saturday at 28.6C (83.4F). As most of us enjoy the glorious weather there will of course be the naysayers pointing out high pollen counts, impending storms and pollution clouds are now all out to get us. If you would like to talk to some of those that thoroughly enjoyed the sun this weekend and who are ignoring the cynics, give our dealing team a call on 020 7597 4000.

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