GBPUSD & EURGBP, H1
UK labour market data revealed a massive 856.5k spike in jobless claims in April, reflecting the impact of the lockdown, while the figures for March employment cover a period preceding the lockdown (which began on March 23rd in the UK), and showed the unemployment rate actually dipping, to a rate of 3.9% from 4.0% in February. Average household earnings data also preceded the lockdown, and showed a dip to a growth rate of 2.4% y/y in the three months to March in the with-bonus figure, down from 2.8% y/y in the three months to February.
Cable rallied to 1.2250 on a softer dollar and data not being a weak as expected overall, EURGBP moved down to test the daily pivot point at 0.8920.
There is some risk that German ZEW Economic Sentiment could fall back slightly in the May reading. The DAX (GER30) bottomed out in March as lockdowns came in and the improvement helped to boost sentiment in the April reading. But Germany’s benchmark stock index has essentially moved sideways of late as data releases reveal the extent of the impact of the lockdowns on economic activity in Germany and globally. Against that background median expectations are for 30.0 in May – versus 28.2 in April. Hopes still are that economic activity will improve again in the second half of the year, although clearly uncertainty is much higher than usual and if a second round of infections should make new restrictions necessary, the risk of a longer term negative impact on investment and production capacity is very high.
Later in the north american session we have testimony to the Senate banking commission from Messrs. Powell & Mnuchin and US Housing Starts and Building permits.
Click here to access the HotForex Economic Calendar
Head Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.