Forex Analysis for Friday 4th November 2016
Thursday saw UK Services PMI beat expectation (54.5 vs 52.5). The UK’s High Court ruled that it would be illegal for the government to invoke Article 50 triggering Brexit without parliamentary approval. At the Bank of England’s Super Thursday rates stayed at 0.25% and QE at £435B as expected each by a unanimous vote.
US ISM Non-Manufacturing PMI missed (54.8 vs 56.2).
Markets are now pricing in a 74% probability of a rate cut at next week’s RBNZ meeting.
This morning (Friday) we had Australian RBA Monetary Policy Statement reiterating policy easing is to support growth and stated that growth in Australia’s major trading partners is slightly below average and is expected to weaken a little during forecast period. RBA cut H1 2018 growth forecast to between 2.5%-3.5% from previous 3.0%-4.0%, all other notable growth and inflation forecasts were maintained (ZeroHedge). Finally, Australia saw a good Retail Sales m/m number (0.6% vs 0.4%).
US equities still moving downwards on election fears. FTSE100 and Euro50 similarly.WTI drops below the 50MA despite OPEC trying to talk up the chances of a production cap at end November.The USD continues to drop and the JPY strengthen during the day but closing close to the open. The GBP strengthens on the High Court ruling. CAD continues to drop on oil price concerns and the NZD inexplicably strengthens as we head into next week Wednesday’s rate setting meeting.
Little of note.
Today we can expect US Non-Farm Payroll and Average Hourly Earnings m/m.
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