Weekly Market Report 05/06/2017

Market Report

With events on London Bridge on Saturday night rightly taking centre stage over the weekend and bringing a halt to the general election campaigning Sterling remains little changed this morning. With the campaigns resuming today, however, we expect to see the return of opinion polls which have been increasingly showing a much tighter vote than was originally predicted. Polls though themselves seem to carry the reliability of a politicians promise and it is likely that markets will remain steady early in the week awaiting some clearer indication of the actual outcome. It is then expected (assuming votes are cast in line with predictions) that Sterling will make solid gains on Thursday as exit polls begin to outline the new political landscape. Any client with an interest in moving GBP either side should be in regular contact with their account manager to ensure full protection from the volatility Thursday could bring.

It is worth noting that the exit polls won’t be the only big news on Thursday as the ECB is meeting and there is speculation that there could be a change is stance regarding interest rates. Anything that suggests rates could rise will provide a notable boost for the single currency, although it remains to be seen how soon Europe could realistically move the base rate up with so many economies to manage.

Looking to the middle east and a host of nations in the region have cut diplomatic ties with Qatar causing a sharp rise in the price of oil. The dispute and the potential choke of supply from the middle east could provide further support to commodity based currencies such as AUD.

Fundamentally this week has been circled on the calendar by many investors as the week that volatility will rise significantly following a period of unusual calm. While the direction of markets is as yet a mystery, this volatility will ultimately bring risk and reward for those making international transfers.

Economic Calendar

Tuesday
10:00  EUR     Retail Sales (YoY) (Apr)
10:00  EUR     Retail Sales (MoM) (Apr)

Wednesday
08:30  GBP     Halifax House Prices (3m/YoY) (May)
08:30  GBP     Halifax House Prices (MoM) (May)
10:00  EUR     Gross Domestic Product s.a. (YoY) (Q1)
10:00  EUR     Gross Domestic Product s.a (QoQ) (Q1)
12:00  USD     MBA Mortgage Applications (June 2)

Thursday
24hr   GBP     Parliamentary Election
12:45  EUR     ECB Interest Rate Decision
12:45  EUR     ECB Interest Rate Decision
13:00  EUR     ECB Monetary Policy Statement and Press Conference

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