Lack of good news starts impacting markets

Good morning

It was another quiet day in the currency markets yesterday, most of time spent wondering if the US dollar would extend gains against GBP beyond 1.3500 or so, it tested there a few times through the afternoon but always managed to creep back above that area.  EURUSD meanwhile had a slightly tougher time, perhaps led by a worsening consumer confidence number that saw EURUSD reach 1.1715 which allowed GBPEUR to make new April highs around 1.1520.  EU stocks were generally lower while US markets showed surprising resistance to the lack of good news from Iran.

USDJPY ticked higher to 159.50, still that 160 area caps the upside and it may be worth pointing out that through April we have seen a series of lower highs as we have traded into the 159s.  Japan inflation numbers are due out overnight, I’d imagine they will also show a shift higher due to the Middle East crisis.   

As I type the USD is having another push higher, with downside pressure on GBPUSD taking it to 1.3485.  We have tested this area several times since the start of the week, it has held so far but surely at some point it will break lower unless we get any positive news from the Middle East.  EURUSD is just below 1.1700 which puts GBPEUR at 1.1525.

In terms of Iran, Trump had previously extended the ceasefire indefinitely but were reports that he is now offering just a three to five day extension.  This has been denied by the White House who have said Trump has not set a deadline, although I’m sure Trump was keen to act after the press suggested his indefinite extension was a sign of weakness.  Asian equities closed lower and European markets are following suit, not helped at all by unconfirmed reports of air strikes on Iran, although this was most likely a false alarm.  Oil prices squeezed higher, they did soon return but the lack of any good news seems to keep pushing oil higher with Brent now $103.50, well ahead of WTI at $94.40.

In sport, the big news of course was Man City’s win at Burnley, unimpressive as it was, sees them overhaul Arsenal at the top of the Premier League.  Five matches to go and everything to play for.  Leeds scored a last minute equaliser against Bournemouth to surely ensure their own survival chances and at the same time prevent Bournemouth from creeping into the top six.  In other news, Chelsea have sacked their manager after a string of losses in which Chelsea didn’t score a single goal, the last league goals they scored were back on 4^th March.  Leeds and Chelsea meet in the FA cup semi-final this weekend, Leeds must fancy their chances there.

Aussie PMIs overnight were surprisingly strong, this morning we’ll have EU and UK equivalents, not expecting any great news here after German PMIs released just now came in below expectations.  US PMis will be out this afternoon.  UK retail sales will be released early tomorrow morning.

Have a great day…

-  09.00 EU manufacturing, services PMIs

-  09.30 UK S&P manufacturing, services PMIs

-  13.30 US initial jobless claims

-  14.45 US S&P manufacturing, services PMIs

-  16.00 ECBs Nagel speaks

-  00.01 UK GfK consumer confidence

-  00.30 Japan CPI

-  07.00 UK retail sales