Global Themes

Pound rallies higher on strong services PMI data

  • Pound rallies as UK Services PMI beats expectations this morning
  • Macron and Le Pen still clear front runners after French presidential debate last night
  • March FOMC minutes released tonight

GBP

Pound rallies as UK Services PMI beats expectations this morning
Coming in at 55.0 above market expectation of 55.3, the service sector showed expansion for the eighth consecutive month.

This latest number shows the fastest pace of expansion since December 2016 making up for a disappointing number in February. The survey showed that a number of companies still see Brexit-related uncertainty as a major concern, however the lower pound has improved demand from overseas clients.

French Election

Macron and Le Pen still clear front runners after French presidential debate last night
Polls following the debate showed far left communist-backed leader Jean-Luc Mélenchon winning followed by Macron with anti-EU candidate Le Pen a distant third.

Macron and Le Pen are now virtually neck and neck in first round polling with Macron erasing Le Pen’s substantial lead from earlier this year. Le Pen was accused of having no economic policy and much was made about the negative impact that exiting the Euro could have on the French economy. 

FOMC

March FOMC minutes released tonight
Of interest will be any insight as to why the longer run outlook for US interest rates was not revised higher, even though the Fed upgraded their view on the US economy for 2017.

These minutes will also be the first to include fan charts outlining members’ uncertainty around their projections, possibly depicting some of the internal debate around the pace of interest rate rises and at what point the Fed will need to begin reducing their balance sheet after years of quantitative easing




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