Pound Remains Strong Ahead of British Jobless and Wage Data, Australian Dollar Dropped

Market Reviews

The Pound stays the firmest for this week, despite having lowered versus Dollar, Euro and Japanese Yen. Today’s highlight is British employment figures. Unemployment rate is projected to remain at 4.3% in February. Average weekly earnings should rise to 3.0% 3moy. So far, three quarters of analyst forecast a BoE rate hike in May, up from 54% and the data will help assess the chance of policy tightening. If data points at a downturn, Bank of England might wait until November when it comes to Brexit decision. If inflation points at a pick up, the Bank might hike one more time in November.

Aussie declined as RBA protocol indicated that members have once again stood pat. Kiwi and Loonie weakened as well. Members of Australian Central Bank remained optimistic over the growth in 2018, particularly the GDP’s one. CPI inflation was projected to “increase gradually” to exceed the 2% target. Leading indicators kept indicating “above-average growth in employment”. RBA also expressed concern about the trade tension. Concerning the currency, members told that “an appreciation of the Australian dollar would be expected to result in a slower pick-up in economic activity and inflation than forecast.”

Chinese Gross Domestic Product of the first quarter increased 6.8% yoy. Retail sales were up 10.1% yoy in March, from 9.7% yoy. Industrial production grew 6.0% yoy, less than prior 7.2% yoy. Fixed assets investment reduced from 7.9% to 7.5% yoy. US Treasury data showed unveiled that China still has the biggest foreign creditor to the United States, holding the bonds, bills and notes of 1.18 trillion dollars. The second biggest foreign creditor to the US is Japan, debts of which fell from 1.07 trillion dollars to 1.06 trillion dollars.

Today, Germany will release ZEW economic sentiment, Canada will announce international securities transactions and the US will feature housing starts and building permits, industrial production and capacity utilization.