Analysis and Recommendations (GBP/USD Forecast):
The GBP/USD took a big fall after inflation data turned negative. The pound gave up 125 points to trade at 1.5529. Bank of England governor Mark Carney warned last week that the central bank believed inflation could enter negative territory – albeit briefly. The Office for National Statistics said its consumer price index measure of inflation was down 0.1% in April from a year ago. That compared with the inflation rate at zero in February and March.
Statisticians said this was the first time the CPI had fallen since official records began in 1996 and the first time since 1960 based on comparable historic estimates. The fall in living costs will be welcomed by many as it means workers’ wages go further, after years when pay was falling in real terms. But for savers it means interest rates will remain low and there are also warnings that negative inflation is a symptom of underlying weakness in Britain’s economic recovery.
Shadow chancellor Chris Leslie said: “Any relief for households is welcome, but this month’s figures reflect global trends and that doesn’t change the reality that many are still struggling to pay the bills.
“The government must clearly guard against the risk that business investment might be deferred. We need stronger action now to raise productivity to deliver sustainable growth and rising living standards.”
The latest inflation figure means that a basket of goods and services that cost £100 in April 2014 would have cost £99.90 in April this year.
The last time CPI inflation was negative, according to estimates by the ONS, was March 1960, when prices were 0.6% lower.
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 GBP/USD 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 GBP/USD 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
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