[B]Intra-Day Market Moving News and Views
21 Jan 2015[/B] [I]03:30GMT[/I]
[B]GBP/USD[/B] - ..... The pound pares yesterday's spectacular rally from Asian 1-week low of 1.5058 to as high as 1.5200 in NY morning. Some touted this move on possible M&A deal whilst some tied this to active buying of sterling vs yen & eur.
However, renewed weakness in eur/usd in NY session later triggered broad-based long liquidation in sterling and cable retreated to 1.5136 in Asia, suggesting choppy trading below said yesterday’s high would continue today.
Range trading this morning was expected ahead of release of MPC’s Jan minutes n U.K. jobs data at 09:30GMT.
Offers then were tipped at 1.5160/70 and more with stops above 1.5200. Initial bids are noted at 1.5140-30 and more at 1.5110-00.
With U.K. general election looming in May, Blooming reported lose-lose for business as U.K. election defies prediction.
Businesses faced with a general election in the U.K. are finding that the only thing certain about the vote is its unpredictability. 3-1/2 months before the ballot, polls agree that neither PM David Cameron’s Conservatives nor the Labour opposition are likely to win a majority. And the odds have already shortened on a rerun having to be held this year.
That makes companies’ forward planning increasingly difficult even as the U.K. economy gathers strength, inflation drops n interest rates look like staying at a record low. 16 of 36 economists surveyed by Bloomberg News identified political uncertainty as the biggest threat to Britain?s recovery, making it the second biggest risk after weak demand fm the euro area, which was cited by 18.
Both parties’ electoral agendas are also cause for concern. The U.K. Independence Party’s growing popularity has forced Cameron to harden his stance on Europe and to pledge a referendum on EU membership by 2017 if he is re-elected, pitting him – unusually for a Tory leader – against the majority of British businesses. Meanwhile, Labour leader Ed Miliband’s pledges to freeze energy prices and raise taxes have been greeted with unease.
The EY ITEM Club also cited possible shocks from the U.K. election as a risk that “should not be neglected” in its winter forecast, published this week.
Still, with polls consistently putting Labour n the Conservatives neck and neck, questions such as the likelihood of a referendum may not be resolved on May 7. A survey by YouGov Plc carried out on Jan. 18 n Jan. 19 found the Tories n Labour tied at 32 % of the vote – not enough for either party to get a majority in Parliament. The poll of 1,747 people also put UKIP support at 15 %, with the Liberal Democrats at 8 % n the Greens at 7 %.
[B]Wednesday[/B] will see the release of New Zealand’s CPI, Australia’s Westpac Consumer Confidence, Japan’s BoJ rate decision, Monetary Policy Statement, Leading Economic Index, BoE MPC vote outcome, U.K.'s Average Earnings, ILO unemployment rate, Claimant Count Unemployment Change, Canada’s Wholesale Trade, BoC’s rate decision, U.S. Housing Starts, Redbook and Building Permits.