GBP - British Pound
Yesterday morning’s wage figures flew in the face of the continued Brexit shenanigans as the labour market maintains its impressive pace with employment now reaching fresh record highs, whilst the unemployment rate – 3.9% - is at 44 year lows. The all-important wage growth number as well matched expectations (we are all getting richer) and this could be underpinned if inflation comes in as expected this morning around 2%. Whilst this seems great news the pound turned a blind eye and as a suitor at the moment job figures are playing second fiddle to Brexit. Easter it seems has taken full effect, and sterling’s cold shoulder response to yesterday’s data is due to the shortened week as well as the fact that Brexit is still dictating terms for the pound. However, the jobs numbers does remind investors that there are parts of the UK economy that remain fundamentally sound. This morning sees the latest release of inflation figures which as mentioned is expected to come in at healthy 2% but the question remains, will the pound be nonplussed? Probably.
Any recovery in Germany seems to be coming at a tectonic pace. Despite a bounce back in the influential ZEW survey the outlook for Europe’s largest economy is still clouded with industrial figures in February stagnating. The Euro was largely on the back foot yesterday and this was compounded in the morning when rumours around ECB policymaker divisions and reports that several members think that the bank’s projections are too optimistic. Worrying times for the Euro.
In China however, the story is different with GDP figures coming out overnight better than expected. The Chinese economy has bounced back, largely due to the fiscal stimulus being pumped into the economy and industrial production also surged, the backbone to the world’s second largest economy. The Aussie dollar, one of the main proxies for Chinese economic health, has benefited overnight as well rallying 0.5% against its US counterpart. Its antipodean neighbour however has had a nightmare overnight though with inflation figures coming out in New Zealand a lot worse than expected. The Kiwi dropped around 1.4% and is now at 3 month lows against the USD. Back in March, the Reserve Bank of New Zealand mentioned its next action could be an interest rate cut which now could become a possibility at its next meeting in May.
1.3050 - 1.3120 ▲GBP/EUR:
1.1500 - 1.1580 ▼GBP/AUD:
1.8120 - 1.8200 ▼GBP/NZD:
1.9340 - 1.9450 ▲GBP/CAD:
1.7350 - 1.7440 ▼