World First Morning Update 30th April: Spanish recession confirmed as make-or-break week begins
www.youtube.com/watch?v=ec2ABZxcppU
Friday’s slip in US GDP has been largely overlooked by the market it seems, with risky assets pushing higher once more on Friday afternoon and in today’s Asian session. Some people are putting this down to the relatively good news that we have been having from the corporate sector, but we believe it to be also a result of a lack of really tragic news from the Eurozone for at least a couple of days.
It is a hugely important week of data for the world economy however, and could easily form a short-term turning point for the fortunes of the markets with this spurt upwards in risk coming unstuck.
Today’s calendar is the quietest of the week with most people focusing on Spanish GDP that is due early this morning and is expected to show that yet another European country is back into recession. Spanish and Italian bonds have strengthened a tad since the Asian open before the announcement although sentiment has been hit by the ratings agency Standard & Poors’ downgrading of 11 banks’ credit ratings overnight. There were demonstrations in 55 Spanish cities yesterday against the government’s austerity measures which is only adding to market tensions.
This week also sees the latest publication of world PMIs from manufacturing, construction and services sectors. While some PMIs have been strong, such as here in the UK, this has not translated through to economic growth in the form of GDP which we find puzzling. All three PMIs are expected to move lower here in the UK for the month of April and could be the catalyst for UK weakness reflected through the pound.
The ECB also meet on Thursday, ironically enough in Barcelona, with the situation in Europe suggesting that a fresh interest rate cut could be needed. It won’t happen however, given the Bank’s natural proclivity to being petrified of any inflationary risk, but once again Draghi’s comments will be closely viewed for hints of further assistance to either European banks or the sovereigns themselves.
To round it all off, we have the US jobs number on Friday before the French and Greek elections over the weekend. Hollande is the overwhelming favourite to boot Nicolas Sarkozy out of office and his stance on the newest EU fiscal pact will have members of the EU commission squirming. He wants it renegotiated which means Europe crossing a very painful bridge again.
Good luck.
Latest exchange rates at time of writing
|
Indicative Rates |
Sell |
Buy |
|
GBPEUR |
1.2262 |
1.2289 |
|
GBPUSD |
1.6169 |
1.6194 |
|
EURUSD |
1.3169 |
1.3192 |
|
GBPJPY |
130.40 |
130.65 |
|
GBPAUD |
1.5575 |
1.5605 |
|
GBPNZD |
1.9892 |
1.9919 |
|
GBPCAD |
1.5928 |
1.5937 |
|
NZDUSD |
0.8119 |
0.8139 |
|
GBPZAR |
12.60 |
12.65 |
|
USDZAR |
7.7835 |
7.8230 |
|
GBPPLN |
5.1191 |
5.1459 |
|
EURJPY |
106.28 |
106.53 |
|
Please note these rates are “interbank” rates ie they indicate where the market is currently trading and are not indicative of the rates offered by World First. Rates are dependent on amount transacted. It is important to remember that foreign exchange rates fluctuate all the time. The rate you will receive will depend on the amount and currency you require. Please call 0800 783 6022 or +44 20 7801 9080 for a live quote or login in to your Online Account here. |
||
To the comments, Author: jeremy e64c42cdda509545a9ee0aefaca45a8f (209.85.224.92) To the comments, Author: jeremy
World First Morning Update 1st May: Sterling slips away from highs ahead of manufacturing number » « World First Morning Update 27th April: Spain downgrades breaks market calm