by Orbis Exchange
Market Report 08/05/23 - 12/05/23
- BoE Interest Rate Decision
- HICP Data released in Germany
- CPI Data released in the US
Last week we had the CIPS Composite PMI released, this saw a growth for the month of April from the last result, this means we saw improvement in both the Manufacturing and Services Sectors. We also had Local elections last week, more than 1,000 Tory seats have changed hands with Labour picking up more than 500 seats. PM Rishi Sunak labelled the loss of councillors “disappointing”, whereas Labour leader Sir Keir Starmer says this puts them “on course for a Labour Majority at the next general election”. Last week we Pound was trading at the highest point against the USD for 12 months and the EUR for 5 months. This week we have the BoE’s interest rate decision, they are expected to follow suit with the EUR and USD of a 25 bps rate hike, if we see a raise in the interest rate then this could have a bullish effect on the Pound, but if we see the interest rate unchanged or even a rate cut, then this could have a bearish effect on the GBP. Also, we have the GDP figures being released this week, if we see a rise then this could have a positive effect, whereas if we see no change or even a drop from the previous result, then this could have a bearish effect on GBP quotes.
We had inflation data released last week just before the ECB’s interest rate decision, because we saw a drop in the inflation, this could have influenced their decision to continue to be hawkish with their rate hikes. We saw a 25bps raise in the Eurozone’s interest rate.Following the decision the Euro weakened by over 1% against the Pound. We also had retail sales figures released at the back end of last week, this saw a further drop from the last result to -3.8%. This led to the Euro finishing the week on a bearish note. This week we have HICP Data being released from Germany, this will give us an idea on what effect the ECB’s latest Monetary Policy decision will have on inflation levels in Germany and the Eurozone.
The Federal Reserve’s interest decision was released last week, this saw a result of 25 bps rate hike for the US, following the last 2 rate hikes. As inflation is slowing in the US, this is where we could see the Hawkish Fed begin to slow down. Indications this could happen in the following months lead to the USD weakening to lowest point against GBP for 12 months. We also had Nonfarm Payrolls last week, this saw an increase from last month’s result leading to further USD weakness. Further advancements were made last week in the war of Russia and Ukraine, a drone attack on the Kremlin was attempted. Russia has put the blame on the US, if further advancements are made on this, then it could lead to Dollar volatility. This week we have CPI data being released, this will show us if the Fed’s Interest rate decision was best or if they will need further rate hikes in the future.
No comments yet