- Sterling holding up ahead of elections
- Euro stronger on French election expectations and rumours of Greek deal
- Aussie interest rates on hold
By Joe De Berniere
The UK services sector, which accounts for around 70% of total economic growth, rose from 55 to 55.8 in April – better than the expected drop to 54.5. This is the highest it’s been for 4 months and it has now been above the 50 level that marks the divide between growth and contraction for nine months in a row. The strong performance from the UK’s most dominant sector, together with equally upbeat surveys for construction and manufacturing earlier in the week, completes the hat-trick for the UK’s data. This suggests the economy is currently growing at twice the pace than that seen in the first quarter of the year. Rising inflation, however, is due to cut growth.
The Pound didn’t move a great deal as a result against EUR although it did gain against USD, NZD and AUD, in this instance, hitting 1.7477 – the highest since September 2016. The Canadian trade balance came out worse than forecast but their unemployment claims improved providing some support for CAD. In the afternoon, US trade balance beat forecasts by over 1bn. In other news, it was announced Prince Philip would step down from royal duties. Markets didn’t move as a result.
The focus of today will be US non-farms and unemployment figures. Last month’s report was surprisingly poor although still came in at 176k and hasn’t dropped below 170k since 2013. Non-farms are expected to come in at 194k. Anything around here or up to 210k will probably be market neutral, something near the 150k mark should see USD retreat. We also have speeches from Janet Yellen and Stanley Fischer tomorrow afternoon. These could prove to be more market-moving than the payroll number itself. Canada’s employment change and unemployment rate also out at same time.
A real gut-buster
A woman noticed her husband standing on the bathroom scales, sucking his stomach.
“Ha! That’s not going to help,” she said.
“Sure, it does,” he said. “It’s the only way I can see the numbers.”