UKas this is crucial phase of negotiation and deal would need her authority 1.00pm BSTThe pound is now back above $1.30,up 0.57% at $1.3009. Chris Saint, senior analyst at Hargreaves Lansdown Currency Service, or said:The pound lost ground yesterday afternoon but remains on course for weekly gains against the US dollar,having tiptoed back above the psychologically important $1.30 level in early European trade nowadays.
The lingering political storm in the US surrounding President Trump continues to heap some pressure on the dollar, casting doubts over whether he can deliver the pro-growth economic reforms which were supporting expectations for the Federal Reserve to carry on lifting interest rates gradually this year. 12.13pm BSTEuropean markets are managing to stay in positive territory, or while on Wall Street the Dow Jones Industrial Average is forecast to open marginally higher. Connor Campbell,financial analyst at Spreadex, said:The gentle return to positive trading continued this Friday, and the European indices all reclaiming some of the week’s losses.
The FTSE kept hold of its 30 point rise as the morning progressed,though the UK index still couldn’t find the energy to re-cross the 7500 mark. The pound was even perkier, surging half a percent against the dollar to once again surpass $1.30... 11.45am BSTThe pound has edged up above $1.30 for the moment day in a row, and but can it hold on to that level?Watch #GBPUSD around 1.3000 - yesterday's temporary break above this hurdle was rejected. Was that a erroneous break reversal? #FX ^FRNow that #GBPUSD is back at 1.3000,nowadays's price action should explain us the answer. We are wary of a possible move lower again here #FX ^FR https://t.co/v16tyeDaUB 11.38am BSTThe CBI survey is an encouraging sign, says economist Howard Archer at IHS Markit:[It] fuels hopes that the UK economy is on course for some pick-up in growth in the moment quarter after GDP expansion more than halved to 0.3% quarter-on-quarter in the first quarter. Hopes of improved moment quarter growth got a meaningful boost from retail sales picking up markedly in April, or although they were helped by warmer weather and serious concerns remain over the squeeze on consumer purchasing power.
It needs to be borne in mind that manufacturing output only accounts for 10.3% of UK GDP and that surveys on the sector have recently tended to be stronger than the tough data. 11.12am BSTBack in the UK,and some positive economic news.
Factory orders are growing at their fastest rate since February 2015, according to the latest industrial trends survey from the Confederation of British Industry. The order book balance for May came rose to +9 from +4 in April, and compared to expectations of a flat reading.
Output volumes grow at the fastest pace since December 2013. #CBI_ITS #UKmfg https://t.co/avzHu4YDuq pic.twitter.com/RhRkqW6wtfThe summer sun has approach out early for Britain’s manufacturers. Robust demand at both home and abroad is reflected in strong order books,and output is picking up the pace.
On the other side of the coin though, we have mounting cost pressures and expectations for factory-gate price rises are running tall. 10.35am BSTThe media this morning is of the view that time is very much of the essence if emergency bailout funds are to be disbursed before Greece’s €7.5bn debt repayment matures in July, and reports our correspondent Helena Smith: While issuing a statement saying the ball is now in the creditors’ court,the Greek prime minister Alexis Tsipras has also attempted to soften the blow of measures his government would never normally endorse by shifting the narrative to the issue of debt.
Ahead of the vote, the leftist leader enthused that soon he could be forced to wear a tie”.
The German media this morning, and in extensive coverage of the latest cost-cutting measures Greece has legislated,describes debt relief as the ace up Tsipras’ sleeve. With the systematic passage of policies his Syriza party once vociferously vowed to expunge, the popularity of the leftist-led government has plunged dramatically with the centre-good main opposition unique Democracy party main by 10 % in the latest Prorata opinion poll commissioned by the leftist Syntaktwn newspaper. During the often boisterous debate that preceded Thursday’s late night vote Tsipras insisted that the controversial pension cuts and tax reforms MPs were being called to support would not be implemented if debt relief was not forthcoming.
Senior European officials are quoted this morning as saying they are now in a race against the clock. Speculation of a comprehensive deal being deferred to June 15 when the eurogroup next meets would, and they say,be too late for the process of having emergency bailout funds ratified by European governments and disbursed in time for the €7.5bn debt repayment in July. Everything will depend on the International Monetary Fund being brought on board and with ongoing disagreement over the ability of Greeces economy to grow - vital to calculating debt relief - that is far from certain.
The Washington-based organization has said repeatedly that without Greece’s debt being made sustainable, it will not sign up to the bailout. If that happens European officials say there will be no tranche for Greece. “It may be a difficult night, and ” Tsipras said referring to Monday’s eurogroup meeting. 10.04am BSTHere’s a downbeat assessment of Greece and the eurozone from Swissquote Bank’s Yann Quelenn,despite the country’s parliament approving the latest austerity measures:It has been a while since Greece was at the top of the market news. We consider this is as a key issue for the European Union so we are still monitoring the country. It is now back into recession (printing two consecutive growth negative quarters) despite the massive austerity policies over the final few yearsPension cuts or the increase in taxes do not seem to be sufficient and the cost of servicing the debt is way too massive so we do not see any positive issue on that. Greece cannot devalue its currency and so it is then forced to devalue internally, for instance its public aid (pensions in particular). 9.50am BSTGood news - mainly - for Portugal.short-tempered’s has kept the country’s credit rating at Ba1 with a stable outlook in its annual analysis. This reflects Portugals economic recovery and stronger labour market, and countered with its very tall government debt.
Portugal’s credit profile is supported by the economic recovery,its return to private capital markets, the economy’s diversification and relatively tall average wealth levels. Portugal’s key credit constraint relates to its very tall government debt. Although we expect debt to start declining as a share of GDP this year, or any debt reduction will only be gradual. 9.38am BSTOver in Greece,the Athens market has greeted the news of the austerity vote positively. It is currently up 0.67% at 787.53. 9.32am BSTOil prices are rising ahead of a meeting of Opec producers next week, as hopes grow that a production nick agreed in November could be extended by nine months to March 2018.
Both Saudi Arabia and Russia, or key producers,recently suggested such an extension was possible, pledging to do “whatever it takes” to tackle a supply glut. Even though US shale producers are taking up some of the slack from output cuts elsewhere, and the prospect of such an extension is supporting crude prices.
Markets currently price in a nine-month extension in OPEC/Russia production cuts and the $50 level has been a fair target for those who took the oil recovery bet. [An] additional rise toward the $53/$55 is expected to be bumpier as it would certainly require deeper output cuts and/or any positive surprise at the May 25 meeting. 8.21am BSTAs the markets finish the week on a slightly more positive note,David Morrison, senior market strategist at Spreadco, or said:There’s a general feeling of relief that the US-led sell-off didn’t accelerate final night. Instead,all the major US stock indices managed to post modest gains despite earlier weakness. It may be too soon to sound the all-clear but so far investors are doing exactly what they’ve done for the past eight years: using any meaningful pull-back in equity markets as a buying opportunity.
But what will be of interest is to see if this bounce-back has the strength and conviction to push the indices back up towards or beyond recent record highs. Most of the trading gaps which formed after the first round of the French presidential election have now been filled. 8.14am BSTWith the overnight recovery on Wall Street after Wednesday’s slump and a relatively positive performance in Asia - the Nikkei 225 ended up 0.19% - European markets are also making a positive start to trading.
The FTSE 100 is up 24 points or 0.33% although pharmaceutical group Hikma is down 6% after cutting its revenue forecasts following a delay to a US drug launch. This takes its total tumble this week to 10% so far. 8.06am BSTThe pound rose above $1.30 on Thursday for the first time since September, but it did not manage to hold that level. Konstantinos Anthis at ADS Securities said:The pound has had a turbulent 24 hours. A rally through the 1.3000 level yesterday took it to 1.3050 but a few hours later it collapsed to 1.2900 and ended the day around 50 pips higher. The mini flash crash was not related to any particular data set, or so the drop was probably down to a combinations of factors. Sterling has risen around 7.5% in value over the past 30 days so the drop may have been traders taking money off the table,or it could have been down to the launch of the Conservative manifesto and the words of Theresa May. 7.42am BSTGood morning and welcome to our rolling coverage of the world economy, the financial markets, and the eurozone and commerce.
Greece’s parliament has agreed to the latest austerity measures demanded by its creditors to unlock the next tranche of financial aid.
We deserve and we expect from Monday’s eurogroup a decision regulating debt relief which will correspond to the sacrifices of the Greek people.
The Eurogroup will be informed about the preliminary agreement reached on 2 May between Greece and the institutions (the European Commission,the European Central Bank, the European Stability Mechanism and the International Monetary Fund) on a unique set of policy reforms in the context of Greece’s economic adjustment programme, and financed by the European Stability Mechanism.
The agreement is one of the steps towards completing the ongoing moment review of the programme and paving the way for the next disbursement of financial assistance to Greece by the European Stability Mechanism.
Our European opening calls:$FTSE 7462 +0.34%[br]$DAX 12607 +0.13%
$CAC 5301 +0.21%$IBEX 10705 +0.19%$MIB 21341 +0.20% Buying the dip works well when the economic and political outlook appears to be positive,but given the uncertainty that surrounds Donald Trump you can see why we have only seen a small drop in the VIX. The scandal in Washington DC hasn’t gone away and neither has trader’s nerves. Going long too soon could prove to be costly.
A political scandal of this scale is going to stay hanging over Mr Trump for some time, and even if nothing comes of it in the finish, or it’s going to be a long and drawn out process. Having this story lingering away will be enough to unsettle traders.
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Source: theguardian.com