Analysis and Recommendations (EUR/GBP Forecast):
The EUR/GBP declined 26 points as the euro fell farther than the pound as weak inflation data and German economic sentiment. The pair is trading at 0.7202. ECB’s Coeure provided fresh impetus for a sharp move lower in euro, with dovish comments leaked right on the European open, stating that due to seasonal factors QE will be front loaded to May and June, hypothetically deposit rates could be even more negative. The euro fell 150 points in an hour and helped the Bund retrace further some of the severe losses suffered in recent weeks. Equities, of course, reacted positively to the news, with the DAX climbing over 100 points and the S&P making new highs as well.
The pound also fell against the euro after the data, which added to expectations the Bank of England will hold off long into next year with a rise in interest rates.
The Bank of England released its May Inflation Report last week. During the Q&A period, a reporter lobbed Governor Mark Carney an easy pitch to hit home the point that the British pound has become excessively strong. Carney did not take the bait. The British economy has entered into negative inflation for the first time since 1960, according to today’s figures from the ONS.
UK’s annual rate of consumer price inflation (CPI) fell to -0.1% down from 0% previously. It is the first time that the CPI figures have been in negative territory since official records for the CPI index began in 1996.
However, according to the ONS, comparable estimates going back further indicate that is the first time consumer prices have showed deflation since 1960.
ForexTraq provides in-depth analysis for each currency and commodity we review in forex trading. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information for EUR/GBP in our weekly reports.
Today’s economic releases actual vs. forecast:
|NZD||PPI Input (QoQ) (Q1)||-1.1%||-0.7%||-0.4%|
|AUD||Monetary Policy Meeting|
|NZD||Inflation Expectations (QoQ)||1.9%||1.8%|
|GBP||CPI (MoM) (Apr)||0.2%||0.4%||0.2%|
|GBP||CPI (YoY) (Apr)||-0.1%||0.0%||0.0%|
|GBP||PPI Input (MoM) (Apr)||0.4%||0.8%||0.4%|
|EUR||German ZEW Current Conditions||65.7||68.0||70.2|
|EUR||German ZEW Economic||41.9||49.0||53.3|
|EUR||Core CPI (YoY) (Apr)||0.6%||0.6%||0.6%|
|EUR||CPI (YoY) (Apr)||0.0%||0.0%||0.0%|
|EUR||CPI (MoM) (Apr)||0.2%||0.2%||1.1%|
|EUR||Trade Balance (Mar)||23.4B||22.8B||20.3B|
|EUR||ZEW Economic Sentiment||61.2||62.4||64.8|
Upcoming Economic Events that you should be monitoring for EUR/GBP in forex trading:
Wednesday, May 20, 2015
|JPY||GDP (QoQ) (Q1)||0.4%||0.4%|
|JPY||GDP (YoY) (Q1)||1.5%||1.5%|
|AUD||Westpac Consumer Sentiment||-3.2%|
|EUR||German PPI (MoM) (Apr)||0.2%||0.1%|
|GBP||BoE MPC Meeting Minutes|
|CAD||Wholesale Sales (MoM) (Mar)||0.7%||-0.4%|
|USD||Crude Oil Inventories||-2.191M|
|USD||FOMC Meeting Minutes|
Government Bond Auctions
Date Time Country
May 20 09:03 Sweden Holds bond auction
May 21 08:30 Spain Auctions Bonos
May 21 09:03 Sweden Holds bond exchange auction
May 21 09:10 France Auctions BTANs
May 21 09:30 UK Auctions 4.75% 2030 Conventional Gilt
May 21 10:10 France Auctions
May 21 15:30 Italy Announces details of CTZ/BTPei on 26 May
May 21 15:00 US Announces details of 2-year FRN on 27 May, plus 2/5/7 year
May 21 17:00 US Auctions 10-year TIPs
May 22 09:03 Sweden Holds bond exchange auction
May 22 10:00 Norway Details bond auction on 27 May
EUR/GBP analysis forecast
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