Posted by Tom on July 22, 2016


Analysts from Lloyds Bank point out that today’s retail sales report in the United Kingdom for June provides evidence that consumers were the key driver of growth before the referendum.
Key Quotes:
“Retail sales volumes pulled back by 0.9% m/m in June, fully reversing a rise of 0.9% m/m in May, falling short of expectations (LBCB: -0.6%, CON: -0.6%). Nevertheless, the rolling quarterly growth picked up further, from 1.4% last month to 1.6%, leaving the outturn for Q2 above the 1.2% recorded for 2016 Q1.”

Posted by Tom on July 22, 2016


After a knee-jerk bullish reaction to 1.1060 on Draghi's initial comment, the EUR/USD pair is seen fading its spike and dipped into negative territory. The pair is currently trading near session low around 1.1005 region. 
Ahead of the press conference, ECB's governing council decided to keep its main rate and deposit rate unchanged at 0.0% and -0.4% respectively. The central bank also left its marginal lending facility rates unchanged at 0.25% and held its monthly QE target at €80 billion, which will run at least until March 2017.

Posted by Tom on July 22, 2016


Research Team at BBH, notes that the two members of the UK MPC seemed to distance themselves from the dovishness of recent comments from Governor Carney and the minutes from the BOE meeting this week. 
Key Quotes
“They want more hard data post-Brexit.  Sterling rallied a little more than two cents before the weaker than expected retail sales, whose survey period extended until July 2, saw it drop nearly three-quarters of a cent, leaving it little changed from yesterday's NY close. 

Posted by Tom on July 21, 2016


Analysts at BBH have given their technical views on the FX EM space.
Key Quotes
“USD/BRL has retraced over a third of the post-Brexit drop.  The retracement objectives from that move come in near 3.2840 (38%), 3.3150 (50%), and 3.3460 (62%).  The 200-day MA comes in near 3.7165”. 
"USD/MXN has retraced nearly a third of the post-Brexit drop.  The retracement objectives from that move come in near 18.65 (38%), 18.8150 (50%), and 18.98 (62%).  The 200-day MA comes in near 17.73”.

Posted by Tom on July 21, 2016


Sue Trinh, Senior Currency Strategist at RBC Capital Markets, suggests that the CAD has weakened in response to the more cautious risk backdrop, which has seen the USD firm across the board.
Key Quotes                               

Posted by Tom on July 21, 2016


Philip Marey, Senior US Strategist at Rabobank, suggests that in the UK inflation is on the rise as the headline CPI rose to 0.5% year-on-year in June from 0.3% in May.
Key Quotes                               

Posted by Tom on July 21, 2016


Research Team at TDS, notes that the UK employment data for the three months ending in May revealed a relatively unchanged labour market – the unemployment rate improved slightly to 4.9% (its best reading in over a decade) and core wage growth held at 2.4% 3m/y (headline growth bounced from 2.0% 3m/y to 2.3% 3m/y on bonus volatility).
Key Quotes                               
“This is a relatively lagged release, so is not of great importance to the MPC right now, other than suggesting that the UK labour market was in good shape ahead of the Brexit vote.

Posted by Tom on July 21, 2016


Research Team at BBH, suggests that there has been much interest in the fact that the PBOC set its reference rate for the yuan higher (dollar lower) even though the US dollar firmed against the other currencies that officials say it tracks. 
Key Quotes                               

Posted by Tom on July 21, 2016


Kymberly Martin, Senior Market Strategist at BNZ, suggests that the proximate cause of lower NZ yields yesterday was the release of an RBNZ paper on proposed changed to its LVR (Loan Value Ratio) restrictions.
Key Quotes                               

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