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| European Currencies/Markets Under Pressure As French & British Elections Loom | |
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| Tweet Topic Started: Apr 21 2017, 09:20 AM (67 Views) | |
| Webster | Apr 21 2017, 09:20 AM Post #1 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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(Daily Telegraph) Markets are focused on the first round of a tight French presidential election which takes place this Sunday after a shooting overnight in Paris that was claimed by Isil. Yesterday, the euro rallied to a three-week high of $1.0778 against the US dollar after opinion polls showed that Emmanuel Macron would easily beat far-right candidate Marine Le Pen in the second round. However, the single currency fell back from a three-week high after the terror attack in Paris last night. Today, French and German flash manufacturing and services data will be released. However, Michael Hewson, of CMC Markets, said: "Against this backdrop it is likely that today’s French and German flash manufacturing and services PMI’s are likely to play second fiddle, despite the fact that they will probably show that the recovery in economic activity being seen this year in France is likely to continue into April." |
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| Webster | Apr 21 2017, 09:51 AM Post #16 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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(Daily Telegraph) Bank of England's Saunders edges towards rate rise Bank of England policymaker Michael Saunders said on Friday that he expected growth and inflation this year to be higher than the central bank forecast two months ago, and saw scope for rates to rise modestly while still boosting the economy. Saunders, in a speech to small businesses in London, said he did not want to commit to how he would vote at next month's Monetary Policy Committee meeting, as there was still plenty of data to come. But he said that despite uncertainty about the exact terms on which Britain would leave the European Union in 2019, policymakers were not obliged to keep rates on hold until everything was clear. "I judge that the current policy stance is clearly accommodative," he told members of the Federation of Small Businesses. "While not prejudging what I or the MPC might decide on monetary policy – a modest rise in rates would still imply that considerable stimulus remains in place, helping to support output and jobs," he added. The minutes of the BoE's last meeting in March showed that in addition to one policymaker - Kristin Forbes - backing an immediate rate rise, other unnamed MPC members were also considering doing so. Saunders said he "would not be surprised" if consumer price inflation reached 3 percent later this year or in early 2018, and said economic growth could maintain a year-on-year rate of 2pc through this year and next. |
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| Webster | Apr 21 2017, 09:52 AM Post #17 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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![]() --BoE Saunders: MPC underestimated UK economy, not gone soft on inflation. Risk inflation from GBP depreciation steeper than Feb forecast. (Sigma Squawk, 21 April 2017) |
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| Webster | Apr 21 2017, 09:53 AM Post #18 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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(Daily Telegraph) (8:36am US EDT) US stocks to nudge higher at opening bell Wall Street is expected to enjoy modest gains when the opening bell sounds in less than an hour's time, as investors remain on the sidelines ahead of the first round of the French presidential elections on Sunday. Although recent polls showed centrist Emmanuel Macron is leading the four-way race, it remains tight. |
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| Webster | Apr 21 2017, 09:53 AM Post #19 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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--US Opening Calls: #DOW 20604 +0.11% #SPX 2358 +0.08% #NASDAQ 5451 +0.17% #IGOpeningCall (IG Squawk, 21 April 2017) |
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| Webster | Apr 21 2017, 09:55 AM Post #20 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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(Daily Telegraph) French Presidential Countdown Begins FXTM Research Analyst Lukman Otunuga thinks the French presidential elections remain a major event risk that has the ability to send serious shockwaves across the financial markets. He added: "With recent polls indicating a fierce battle between the four candidates in the first round and millions of voters still undecided, uncertainty remains the name of the game. Although Emmanuel Macron has been labelled as favorite to become the next French President, an unexpected Marine Le Pen victory could deal a symbolic blow to the unity of the European Union and ultimately create a tidal wave of risk aversion. Investors should remain diligent as we enter the weekend, and be prepared to expect the unexpected when dealing with the elections’ repercussions on the Euro." From a technical standpoint, he thinks the euro bears may be inspired to the prices lower, towards $1.06850 or lower against the dollar. The euro is currently trading down 0.44pc on the day at $1.0699 against the US dollar. |
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| Webster | Apr 21 2017, 09:56 AM Post #21 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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(Daily Telegraph) France's 10-year government bond turns higher France's 10-year government bond yield has turned higher on the day, reversing earlier falls, as the first round presidential vote looms. According to data from Tradeweb, French 10-year government bond yields are trading up one basis point at 0.87pc. |
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| Webster | Apr 21 2017, 09:57 AM Post #22 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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(Daily Telegraph) (9:35am US EDT) US stocks little changed at the opening bell as French election looms Investors remained on the sidelines this afternoon as US stocks opened little changed ahead of the first round of the French presidential election. At the opening bell: --Dow Jones: +0.08pc --S&P 500: -0.04pc --Nasdaq: +0.04pc |
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| Webster | Apr 21 2017, 09:58 AM Post #23 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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![]() --US stocks open flat as Street looks ahead to French election; earnings still coming strong (CNBC Now, 21 April 2017) |
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| Webster | Apr 21 2017, 09:59 AM Post #24 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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![]() (Dail;y Telegraph) Euro remains under pressure on French election run-in The euro remains under pressure this afternoon, trading just above $1.07, as investors set their sights on the first round of the French presidential election this Sunday. Traders said an upbeat flash Purchasing Managers' Index survey from France and polls showing centrist Emmanuel Macron still in pole position ahead of the vote had helped settle nerves after a dip late yesterday. Meanwhile, the shooting overnight in Paris claimed by Isil had no major impact on the single currency. However, as pre-election jitters kick in, the euro is down 0.4pc at $1.0702 against the US dollar. |
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| Webster | Apr 21 2017, 10:00 AM Post #25 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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(Daily Telegraph) French election is 'kind of reminiscent of the big events last year' While the euro dipped back to $1.07, options markets suggested investors are extremely concerned about the outcome of the French election. "I think everybody is locked down," said Simon Derrick, head of the global markets research team at Bank of New York Mellon in London. "It is kind of reminiscent of the big events last year where people know that it is a binary outcome so the best approach is to remain as cautious as possible." |
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| Webster | Apr 21 2017, 10:25 AM Post #26 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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(Daily Telegraph) Deutsche Bank raises pound forecast but insists its 'far from bullish' Deutsche Bank, one of the world’s biggest sterling bears, has raised its forecast for the pound as it believes the currency will not fall as much as previously expected thanks to the prospect of a 'softer Brexit'. Currency strategists at the bank now expect the pound to fall as low as $1.14 against the US dollar next year from $1.28 currently. By the end of the second quarter of 2017, the bank also has a less bearish forecast of $1.30, up from $1.14, and by the end of this year, they see the pound trading at $1.20, up from $1.06. Earlier in the week, the bank said Theresa May's call for a snap general election was "a game-changer" for the pound. Strategist Oliver Hardy said: "Politics will cease to be the only dominant driver of sterling and fundamentals will matter more. These are far from bullish. Our new sterling forecast reflects our more optimistic view of the Brexit endgame, but not of sterling fundamentals." |
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| Webster | Apr 21 2017, 11:11 AM Post #27 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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(Daily Telegraph) Deutsche Bank: Policy divergence a big problem for sterling Although Deutsche Bank has raised its forecasts for the pound for the year, it said the currency continues to suffer from a dovish Bank of England. Currency strategists said: "The market is currently not penciling in a hike until the end of 2019. Based on two year rate differentials, GBP/USD therefore already looks very expensive and should drift down to around 1.15 next year if the forwards are realized. "The pound could also be vulnerable to ECB tightening in the autumn. Sterling was the largest beneficiary of Eurozone outflows following the introduction of negative rates and QE in 2014 and 2015 respectively. If the Bank of England remains on hold, the Fed taper tantrum experience suggests some of these flows could reverse. "Bank of England pricing does look extreme, but near term it is difficult to pin down what could make them turn more hawkish. Recent UK growth has been weaker, especially on the consumption side, with today’s retail sales data providing more evidence of UK consumers cutting back spending in the face of a real income shock. Hard data, like January’s index of services and January and February industrial production have all printed negative, suggesting that GDP will slow sharply in Q1." |
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| Webster | Apr 21 2017, 11:45 AM Post #28 |
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Wasatch Storyteller & Resident Forum Curmudgeon
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(Daily Telegraph) European bourses close mixed ahead of French election It was a mixed close in Europe as investors remained hesitant in the final trading session before the first round of the French presidential vote on Sunday. By close of play: --FTSE 100: -0.06pc --DAX: +0.31pc --CAC 40: -0.27pc --IBEX: +0.19pc |
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