GBP/USD Fundamental Analysis, May 7, 2015 – Forecast

Analysis and Recommendations (GBP/USD Forecast):

The GBP/USD eased slightly ahead of elections tomorrow. The weak US dollar helped the pound from a collapse. The pair is trading at 1.5176. The government was handed a last-minute election boost after the last major piece of economic news before the polls signaled a booming UK services sector, easing fears of a sharp slowdown in the wider economy.

Growth in the sector, which accounts for roughly three-quarters of the UK economy and includes areas such as bars, restaurants and transport, was stronger than economists predicted, hitting an eight-month high in April.

The headline index of the Markit/CIPS services PMI – broadly reflecting activity in the sector – rose to 59.5 in April, from 58.9 in March, where anything above 5o signals growth

The first data release of the month concerning the manufacturing sector confirms a trend we are seeing right across the globe – economic growth is slowing down.

The slowdown comes despite record-low oil prices and unprecedented amounts of money being pumped into the financial system by global central banks.

The once solid UK economy is apparently not immune to this trend. A reading of 51.9 was delivered by the Markit/CIPS Manufacturing PMI survey. A reading of 54 was expected suggesting this is a big miss in expectations.

ForexTraq provides in-depth analysis for each currency and commodity we review. 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 in our weekly reports.

Today’s economic releases actual vs. forecast:

Cur. Event Actual Forecast Previous
Japan – Greenery Day
  NZD Employment Change (QoQ) 0.7% 0.8% 1.2%
  AUD Retail Sales (MoM) (Mar) 0.3% 0.4% 0.7%
  GBP Services PMI (Apr) 59.5 58.5 58.9
  USD ADP Nonfarm Employment 200K 189K
  USD Fed Chair Yellen Speaks


Upcoming Economic Events that you should be monitoring:

Thursday, May 7, 2015

Cur. Event Actual Forecast Previous
  AUD Employment Change (Apr) 5.0K 37.7K
  AUD Full Employment Change (Apr) 31.5K
  AUD Unemployment Rate (Apr) 6.2% 6.1%
  EUR German Factory Orders (MoM) (Mar) 1.5% -0.9%
  RUB Central Bank reserves (USD) 353.5B
  USD Initial Jobless Claims 280K 262K
  CAD Building Permits (MoM) (Mar) 2.5% -0.9%

Government Bond Auctions

Date Time Country

May 07 08:30 Spain Auctions 0.5% Oct 2017 Bono, 0.55%

May 07 09:10 France Auctions OATs

May 07 09:10 Sweden Holds inflation-linked bond auction

May 08 10:00 Norway Details bond auction on 12 May

May 08 15:30 Italy Announces details of BTP

May 12 09:15 Norway Holds bond auction

May 13 09:10 Italy Auctions BTPs/CCTeus

May 13 09:30 Germany Eur 3bn Feb 2025 Bund

May 13 14:30 Sweden Details bond auction on 20 May

May 14 09:30 UK Auctions 2% 2020 Conventional Gilt

GBP/USD Exchange Rate

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