GBPUSD news - page 89

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Fitch say that Brexit would increase downside risks to EU sovereigns


US ratings agency out with their latest thoughts on Brexit 16 May 2016

Lest we forget that the EU referendum is not just about the future of the UK.

  • we would not expect to take any immediate negative rating actions on other EU sovereigns if UK left
  • negative actions would become more likely in medium term if economic impact were severe or significant political risks materialised
  • EU countries could gain from shift of some FDI from UK to EU
  • Brexit could precipitate Scotland leaving the UK which might intensify secessionist pressures in other parts of EU such as Catalonia in Spain
  • Brexit could boost ant-EU,other populist political parties, make EU leaders reluctant to implement unpopular policies with long-term economic benefits

Put that lot all into the giant Brexit mixing bowls marked " Confused" and/or  " Conjecture"

Meanwhile GBP on the back foot again with GBPUSD down to 3-week lows of 1.4333

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Poll Shows Many People Undecided on UK's Membership of EU


The proportion of people backing the UK's membership of the European Union (EU) has increased to 33% ahead of the June 23 referendum, while the number of those who think they would be better off outside the common bloc came in at 29%, an increase of 2 percentage points. The number of people who remain undecided was 38%, a new poll by a research agency ComRes showed.

The survey also revealed that Prime Minister David Cameron continues to struggle to persuade Britons on his arguments for staying inside the Union, with only 21% of respondents trusting the prime minister, while as many as 45% said Boris Johnson, a top Brexit campaigner, was "more likely to tell the truth about the EU" than Cameron.

Cameron made a strong appeal to voters to support Britain’s membership of the EU in his speech last week, when he said Britain was better off and stronger in the EU despite the bloc's chronic "faults and frustrations."

The prime minister also criticized the supporters of Brexit, saying their actions were "reckless and irresponsible" and that 'Leave' campaigners" had no answers to the most basic questions" on what the relations between the UK and EU would be in case people vote to leave the Union.


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Cable (and GBP crosses) higher in early Tokyo


Its an illiquid time of day (getting better as we approach the entry of more Asian FX centres) which seems to have exacerbated the GBP pop in the past 20 or so minutes

Cable had been grinding it out above overnight highs and has just popped above 1.4410/20 which has driven some stops buying
more to come
 

Brexit latest poll (ORB): 55% want in, 40% want out


When too much Brexit polling isn't enough ... MOAR!

Reuters with the headline:
ORB poll:
  • 55% would vote to remain in the tent EU
  • 40% to leave
 

British Pound’s Outlook Dominated by Inflation, Employment Data


Pound sterling enjoyed a strong recovery through April but gains have since stalled, and under-par data releases have certainly played their part.

  • If UK inflation does beat analyst expectations we would expect the pound sterling to catch a bid
  • Unemployment forecast to have risen, further placing pressure on the Bank of England to keep raise unchanged for months to come

UK economic data released over the past two months has confirmed the UK economy is slowing; and this has presented a drag to the currency which has come under pressure over the course of May.

Economic data influences the British pound via the Bank of England who is tasked with setting the appropriate interest rate levels that reflect underlying economic activity.

In turn, interest rate levels determine how much demand there is for the local currency amongst global investors.

The Bank of England has continued pushing back their guidance on when to expect the first interest rate rise in years based largely on the performance of inflation.

UK inflation has been falling since September 2011 when it peaked at 5.2%. The global oil price slump is one reason why prices actually fell into deflation in 2015.

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UK PPI input April mm NSA +0.9% vs +1.1% exp


UK producer price index April data report  17 May 2016

  • +2.2% prev revised up from 2.0%
  • yy NSA -6.5% vs -6.7% exp vs -6.1% prev revised up from -6.5%
  • output mm NSA +0.4% vs +0.2% exp vs +0.3% prev
  • yy NSA -0.7% vs -0.8% exp vs -0.9% prev
  • core output mm NSA +0.2% vs +0.1% exp/prev
  • yy NSA +0.5% vs +0.3% exp/prev revised up from +0.2%
 

UK Preview: Labor Market Seen Cooling Off Ahead of EU Referendum


The UK labor market remains robust, highly flexible, and so far one of the most resilient in Europe to both domestic and international economic headwinds.

Despite this resilience, there have been signs of slightly cooler employer sentiment to hire new staff, as the number of people out of work grew by 21,000 to 1.7 million in the three months through February, increasing from the previous three months for the first time since the middle of 2015.

The UK's official statisticians said last month that it was "too soon to be certain, but with unemployment up for the first time since mid-2015 - and employment seeing its slowest rise since that period - it's possible that recent improvements in the labor market may be easing off."

Unofficial data from the ONS showed last month that the monthly rate of unemployment picked up to 5.1% in February, from 5% in January.

In the quarter to March, the official quarterly ILO rate of unemployment is seen steady at a decade-low 5.1%. The number of people claiming jobseekers' allowance, a less distant measure of labor market performance, is expected to have risen again in April, although at a slower pace than a month before (6.7K in March versus 2.1K expected in April).

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April 2016 UK retail sales 1.3% vs 0.5% exp m/m


Details from the April 2016 UK retail sales data report 19 May 2016

  • Prior -1.3%. Revised to -0.5%
  • 4.3% vs 2.5% exp y/y. Prior 2.7%. Revised to 3.0%
  • Ex-fuel 1.5% vs 0.6% exp m/m. Prior -1.6%. Revised to -0.7%
  • 4.2% vs 1.9% exp y/y. Prior 1.8%. revised to 2.6

That makes up for last month's poor performance and gives the pound another lift. 1.4646 the high now. Speaking of which, the prior data has been revised up a large chunk because the ONS say that there was late data in from both large and small retailers.

 

Brexit: Latest ORB poll: 55% to remain, 42% to go

ORB is a phone poll

Last week I posted on ORB - back then it was 55 to 40

C'mon June 23 - lets get this over with.

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GBP: An Attractive Buy On Dips Vs These 2 Currencies


The GBP has been well supported of late too, still on the back of somewhat lower expectations of the UK exiting the European Union. According to an exclusive poll for The Telegraph, the “Remain” camp now has a 13 point lead. In an environment of a falling probability regarding a Brexit, investors’ focus should increasingly shift their focus back to growth prospects as a main driver of the currency.

BoE members, including Governor Carney, stressed yesterday that Brexit-related uncertainty was partly behind the recent growth slowdown and that the avoidance of it may cause a rebound. This in turn suggests that there is room of rising rate expectations to the benefit of the currency.

Considering it remains our main case that the UK will stay part of the EU, we believe that GBP dips may still prove an attractive buy, in particular against currencies such as the CHF or the NOK.

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