The Pound is Still Waiting for Brexit Outcome (Weekly Review)

2019-04-01
Last week the main factors affecting the mood of participants in financial markets were trade negotiations between the US and China, as well as the situation around the termination of EU membership by the UK. Progress in the negotiations, which high officials of both countries constantly talk about, maintains hopes for an early end to the trade war unleashed by US President Donald Trump, so investors once again awakened their appetite for risk, and stock markets again show positive dynamics.

As it usually happens, the growth of stock indices negatively affects the dynamics of such a “safe haven” asset as the Japanese yen. And this time, speculators made no exceptions, and the JPY remained under pressure from sellers for the past week. Preserving risk appetite among investors will contribute to further growth of indices, and the USD may continue to rise against the JPY towards the level of 112.00; at the same time, sales waves on stock exchanges and lowering the pair back to 110.00 should not be excluded.

On Friday, the British Parliament again, for the third time, failed the vote on a deal with the European Union, presented by Teresa May. According to the condition set by Brussels, in this case the country must leave the EU before April 12, but the British Prime Minister does not give up, and intends to vote on her draft deal for the fourth time. Thus, volatility in the GBP currency pairs will be maintained; at this stage, its growth attempts can be used for sales, and only positive news on Brexit can return demand for it.

Schedule for this week:

Monday, April 1
08:30 GMT – United Kingdom. Markit Manufacturing Purchasing Managers Index (PMI) (Mar);
09:00 GMT - Eurozone. Consumer Price Index (CPI);
09:00 GMT - Eurozone. Core Consumer Price Index (CPI);
11:00 GMT – United Kingdom. British Parliament’s vote on Brexit;
12:30 GMT - USA. Retail Sales;
12:30 GMT - USA. "Retail Control" (Feb);
13:30 GMT - Canada. Manufacturing Purchasing Managers Index (PMI);
13:45 GMT - USA. Markit Manufacturing Purchasing Managers Index (PMI);
14:00 GMT - USA. ISM Manufacturing Purchasing Managers Index (PMI).

Tuesday, April 2
03:30 GMT - Australia. Reserve Bank of Australia Interest Rate Decision;
03:30 GMT - Australia. Reserve Bank of Australia Rate Statement;
06:30 GMT - Switzerland. Consumer Price Index (CPI);
09:00 GMT - Eurozone. Unemployment Rate;
09:00 GMT - Eurozone. Producer Price Index (PPI);
12:30 GMT - USA. Durable Goods Orders.

Wednesday, April 3
00:30 GMT - Australia. Trade Balance;
00:30 GMT - Australia. Import/Export;
01:45 GMT - PRC. Caixin Services Purchasing Managers Index (PMI);
08:00 GMT - Eurozone. Markit Composite Manufacturing Purchasing Managers Index (PMI);
08:30 GMT - United Kingdom. Markit Services Purchasing Managers Index (PMI);
09:00 GMT - Eurozone. Retail Sales;
12:15 GMT - USA. ADP Nonfarm Employment Change;
13:45 GMT - USA. Markit Composite Purchasing Managers Index (PMI);
14:00 GMT - USA. ISM Services Purchasing Managers Index (PMI).

Thursday, April 4
06:00 GMT - Germany. Factory Orders;
12:30 GMT - USA. Initial Jobless Claims;
14:00 GMT - Canada. Ivey Purchasing Managers Index (PMI).

Friday, April 5
06:00 GMT - Germany. Industrial Production;
12:30 GMT - USA. Unemployment Rate;
12:30 GMT - USA. Nonfarm Payrolls;
12:30 GMT - USA. Average Hourly Earnings;
12:30 GMT - USA. Participation Rate;
12:30 GMT - Canada. Unemployment Rate;
12:30 GMT - Canada. Employment Change;
12:30 GMT - Canada. Average Hourly Earnings;
12:30 GMT - Canada. Participation Rate.

Author: Anthony Porter, IAFT Analyst

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