AceTraderFx Nov 5: Intra-Day Market Moving News and Views (GBP/USD)

Trading Discussion Currencies
141

[B]Intra-Day Market Moving News and Views
08 Nov 2016[/B] [I] 01:12GMT[/I]

GBP/USD - ..... Reuters reported today Britain will only start to lower public debt as a share of GDP at the end of the decade due to a Brexit-related hit to the economy, a think tank said, underscoring finance minister Philip Hammond's challenge as he prepares his first budget statement.

The Institute for Fiscal Studies predicted Britain would run a budget deficit of nearly 15 billion pounds ($18.6 billion)in the 2019/20 financial year, rather than a surplus of 10 billion pounds as forecast in the government’s existing budget projections.
That budget overshoot meant debt as a share of gross domestic product would hover around its current, historically high level of 84 percent until 2019/20 when it would start to fall again, the IFS said

Finance minister Philip Hammond is expected to announce a much bleaker outlook for the economy and the public finances on Nov. 23 when he makes the country’s first budget statement since the June 23 referendum decision to leave the European Union.
He has already signalled he is likely to loosen the purse strings and adopt budget rules that are more flexible than those of his predecessor George Osborne, who last year missed his target to bring down debt as a share of GDP each year.

Thomas Pope, an IFS research economist, said the think tank’s deficit forecast might prove too low because it assumed the government would achieve all the tough spending cuts planned by Osborne and did not factor in promised income tax cuts.
The IFS forecast for public finances in 2019/20 included expenditure savings from the end of British contributions to the EU budget and reduced debt servicing costs due to low yields on British government bonds.

142

[B]Intra-Day Market Moving News and Views
09 Dec 2016 [/B] [I]02:00GMT[/I]

GBP/USD - .... Reuters reported Britain's Supreme Court will decide as quickly as possible whether Prime Minister Theresa May can trigger Britain's exit from the European Union by the end of March without parliament's assent, its president said on Thursday.

Last month, the High Court decided that May could not invoke Article 50 of the Lisbon Treaty, the EU’s exit clause, using executive powers known as the “royal prerogative”.

The case could potentially hamper May’s Brexit plans, and investors believe involving lawmakers would lessen the chances of a “hard” Brexit, where Britain gives up access to the single European market in order to impose tighter immigration controls.
Pro-Brexit critics have cast the legal battle as an attempt by a pro-EU establishment to thwart the result of June’s referendum, when Britons voted by 52-48 percent to leave the EU.

The judges in the High Court case were dubbed “enemies of the people” by one newspaper while Gina Miller, the investment manager who brought the challenge, has received death threats and a torrent of online abuse.

The government’s argument is essentially that under Britain’s unwritten constitution, it can make or leave international treaties without parliamentary assent.
The challengers argue that triggering Article 50 would inevitably mean citizens would lose rights granted by parliament and so only lawmakers could take these away.

The Scottish and Welsh governments and lawyers for Northern Irish challengers all joined the case against the government. Scotland’s nationalist executive, which opposes Brexit, argued that the Scottish parliament should be consulted.
If May wins, she can follow her planned timetable for invoking Article 50. If she loses, she might need to bring in a parliamentary bill, albeit one containing just a single line.

On Wednesday, parliament overwhelmingly voted to back a motion supporting her timetable, which government lawyer James Eadie said was highly significant and “legally relevant”.
Echoing comments made by her lawyer to the Supreme Court on Wednesday, lead challenger Miller said she did not believe the motion in parliament had any bearing on the case.

143

[B]Intra-Day Market Moving News and Views
21 Dec 2016[/B] [I]10:05GMT[/I]

GBP/USD - 1.2341… Despite initial rebound from Asian low at 1.2367 to 1.2385 (Reuters), the British pound met renewed selling and tumbled to as low as 1.2324 in European morning.
However, failure to penetrate yesterday’s 1-month trough at 1.2313 triggered short-covering n price rebounded to 1.2347.

Offers are now seen at 1.2380/90 n more above at 1.2400/10 with stops building up above there whilst initial bids are noted at 1.2290/00, suggesting further choppy trading would be seen ahead of New York open.

144

[B]Intra-Day Market Moving News and Views
13 Jan 2017[/B] [I]01:24GMT[/I]

GBP/USD - ..... The news that made the most impact to price was Thursday's Brexit news which came out near European close which knocked cable from 1.2289 to as low as 1.2152 near New York close.

Reuters reported earlier sterling slipped on Thursday after a spokeswoman said British PM Theresa May will give a speech next week on her plans for leaving the European Union, which sparked fears that she would suggest Britain will undergo a “hard Brexit”.

Sterling skidded to its lowest levels for almost 32 years -excluding a “flash crash” in October - this week, after May said over the weekend that Britain would not keep “bits” of EU membership when it leaves the bloc.
Investors interpreted this to mean Britain would lose access to the lucrative European single market in order to give priority to reasserting full control of its borders to curb immigration.

This scenario has come to be known as “hard Brexit” a phrase that May herself rejects. The pound had rebounded to as high as $1.2317 earlier on Thursday against a dollar weakened by a lack of detail on President-elect Donald Trump’s spending plans in his first news conference since his election on Wednesday.

Traders are also awaiting a decision - expected in the coming days - from Britain’s Supreme Court on whether to uphold a High Court ruling last year that said May’s government needed parliamentary approval before triggering “Article 50”, which will formally kick off Brexit negotiations with Brussels.

Investors reckon that if lawmakers from across the political spectrum - a majority of whom backed staying in the EU in June’s referendum - are involved in activating Article 50, they will push for a “softer” Brexit, which would be sterling-positive.
A further boost to sterling could come if Britain is forced to delay its exit talks because of a potential suspension of Northern Ireland’s regional assembly - which a lawyer said on Wednesday was a possibility. The resignation of Northern Ireland Deputy First Minister Martin McGuinness on Monday effectively collapsed the devolved government.

Bank of England Governor Mark Carney said on Wednesday that the immediate risks from Brexit had fallen, and that the central bank may now raise its forecasts for the UK economy.

145

Intra-Day Market Moving News and Views
01 Feb 2017 10:03GMT

GBP/USD - ..... Cable briefly rose above yesterday's 1.2595 high to 1.2605 in Europe but retreated after release of in-line U.K. mfg PMI. Reuters reported sterling's fall since Britain voted to leave the European Union stoked the sharpest rise in factory costs on record last month but offered little boost to exports, tainting otherwise robust manufacturing growth at the start of 2017.

Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) edged down to 55.9 from December’s 2-1/2 year peak of 56.1, matching the consensus forecast in a Reuters poll.
The survey out on Wednesday suggested Britain’s economy continues to expand at a solid rate after outpacing its rivals last year, with the PMI’s gauge of manufacturing output pointing to the fastest growth since May 2014.

But it also drove home the view shared by Bank of England policymakers, who meet this week, that rising prices will soon put a brake on household spending, a key driver of the economy.

Factories’ raw material costs rose at the fastest pace since PMI records began 25 years ago - fuelled by the pound’s near 20 percent drop against the dollar since June’s Brexit vote, as well as higher prices for steel and oil.
In response, manufacturers raised the prices they charged for their goods at the fastest pace since April 2011.

In previous months spiralling cost pressures had been matched with an improvement in export orders, but this faded in January’s PMI. Orders from abroad rose at the weakest rate since last May, before the Brexit vote.
Manufacturing accounts for around a tenth of British economic output, and recent strong manufacturing PMIs have not fully transferred into subsequent official growth statistics.

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146

[B]Intra-Day Market Moving News and Views
08 Feb 2017[/B] [I]01:13GMT[/I]

GBP/USD - ...... Sterling swung the most vs its peer currencies in Tuesday's hectic trading.

Reuters reported earlier Sterling bounced back from its weakest point in two weeks against the dollar on Tuesday as investors jumped on signs of growing pressure on the government to give parliament a greater say in the final deal to leave the European Union.

Dealers said the pound’s gains back to 1.2547 from an earlier low of $1.2347 were driven chiefly by junior Brexit minister David Jones’ statement that parliament would be given a “meaningful” vote on the deal.

Jones later reiterated the harder line that there would be no renegotiation of the terms the government brings back to parliament. But the mixed messages were read as more evidence of pressure on Prime Minister Theresa May to soften a stance that prioritises control of immigration over membership of the bloc’s lucrative single market.

The gains came after a rough few days for sterling, due largely to a run of surveys suggesting that the economy and consumer demand is finally softening in the face of Brexit-related risks.
Bank of England policymaker Kristin Forbes added to support for the pound by saying the bank should raise interest rates soon if growth remains solid and inflation continues to accelerate.

Further batches of downbeat data - this time from the BRC measure of retail sales and the first fall in UK house prices since the vote to leave the European Union last June - may add to jitters in the days ahead.
While Forbes was read as sounding a harder line on rates than the BoE last week, the data has highlighted concerns over how consumers will bear up in the face of price rises caused by an almost 20 percent fall in sterling.

Another piece of o/n news worth noting which will affect the pound. Reuters reported earlier Britain will not seek further talks with the European Union if parliament rejects the exit deal it reaches, the government said on Tuesday, as ministers defeated attempts to give lawmakers more say on the terms of the final agreement.

The statement, which echoes Prime Minister Theresa May’s stance that “no deal for Britain is better than a bad deal for Britain” came as parliament debated a law that would give her the power to begin exit negotiations with the EU.

147

[B]Intra-Day Market Moving News and Views
13 Feb 2017[/B] [I]10:00GMT[/I]

GBP/USD - … Despite opening marginally lower in New Zealand, the British pound found renewed buying at 1.2479 and gained to 1.2495 at Asian open on cross-buying of sterling vs euro.
Cable continued to ratchet higher in Asia and briefly spiked up to session high at 1.2540 in early European morning. However, lack of follow-through buying triggered profit-taking and price retreated to 1.2506.

Since there is no major eco. data left to be released today, order book is likely to remain light ahead of Tuesday’s key UK inflation data.
Some bids are now lowered to 1.2470/80 and more below at 1.2450/60 with stops building up below there whilst initial offers are noted at 1.2560/70.

148

Intra-Day Market Moving News and Views
16 Feb 2017 09:10GMT

GBP/USD - 1.2489.. Despite yesterday's selloff after being hit by a double whammy of slow UK's wage growth in European morning and then upbeat U.S. data, cable rallied from a 1-week low of 1.2383 in New York morning to 1.2481 and later traded sideways which continued in Asian session today.

Price rose to 1.2498 in European morning due partly to renewed USD weakness as well as cross-buying in sterling, suggesting near term upside bias remains.
Having said that, don’t get overly bullish on cable as price continues to ‘gyrate’ inside recent broad range of 1.2347-1.2582 and position takers are probably on the sideline ahead of Friday’s release of UK retail sales, so range trading should continue today.
Bids are noted at 1.2460-50 with stops below 1.2430.
Offers are tipped at 1.2495/00 with some stops above there, however, more selling interest is touted at 1.2540/50.

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149

[B]Intra-Day Market Moving News and Views
24 Feb 2017[/B] [I]08:00GMT
[/I]
GBP/USD - … Despite rebounding to 1.2561 in Australia, failure to penetrate yesterday’s high at 1.2562 triggered profit-taking n the British pound retreated to 1.2537 in Asian morning.
However, cable found renewed buying there and rose to 1.2570 in tandem with euro ahead of European open and continues to trade with a firm bias.

Bids are now seen at 1.2490/00 and more below at 1.2460/70 with stops building up below there whilst initial offers are noted at 1.2590/00, suggesting choppy trading with upside bias would be seen.

Data to be released on Friday:
France consumer confidence, Italy industrial orders, industrial sales, business confidence, consumer confidence, UK mortgage approvals, Canada CPI, U.S. consumer sentiment and new home sales.

150

[B]Intra-Day Market Moving News and Views
07 Mar 2017[/B] [I]01:05GMT [/I]

 GBP/USD - ...... A piece of downbeat eco. news. Reuters reported British consumers are cutting back on non-essential spending as the impact of last year's Brexit vote pushes up the cost of their day-to-day shopping, two surveys showed on Tuesday.

In a fresh sign of caution among consumers - who helped the economy withstand the Brexit shock last year - the British Retail Consortium industry group and Barclaycard reported signs of weakening demand for more expensive items.

The spending power of households is being stretched by the fall in the value of the pound since Britain’s referendum decision in June to leave the European Union and by a rise in global oil prices.
Inflation has risen to nearly 2 percent and many economists think it will hit 3 percent this year.

British finance minister Philip Hammond is due to announce an annual budget statement on Wednesday and has signalled he will keep money in reserve in case the economy needs help to get through a slowdown in the economy as Britain leaves the EU.

The BRC said total sales rose in value terms by 0.4 percent in February compared with the same month last year, stronger than a 0.1 percent increase in January but below the 12-month average of 0.9 percent.

On a like-for-like basis - which excludes new store openings - sales fell by 0.4 percent, a slightly smaller fall than January’s decline of 0.6 percent but the first back-to-back two-month dip since March and April last year.

Economists taking part in a Reuters poll had expected like-for-like sales to rise by 0.2 percent.

The Bank of England is watching closely to see if households rein their spending as it weighs up whether the economy needs more monetary stimulus to spur demand or an interest rate hike to curb inflation.

151

[B]Intra-Day Market Moving News and Views
29 Mar 2017[/B] [I]02:43GMT
[/I]
EUR/GBP - 0.8715… Sterling tumbled broadly in post -New York close after U.K. PM May signed off formal letter to trigger Brexit. Cable easily penetrated Tuesday’s New York’s 1.2442 low to 1.2377 at Asian open before staging a short covering rebound.

Reuters reported earlier Prime Minister Theresa May will file formal Brexit divorce papers on Wednesday, pitching the United Kingdom into the unknown and triggering years of uncertain negotiations that will test the endurance of the European Union.
On the eve of Brexit, May, 60, has one of the toughest jobs of any recent British prime minister: holding Britain together in the face of renewed Scottish independence demands, while conducting arduous talks with 27 other EU states on finance, trade, security and a host of other complex issues.

The outcome of the negotiations will shape the future of Britain’s $2.6 trillion economy, the world’s fifth biggest, and determine whether London can keep its place as one of the top two global financial centres.

For the EU, already reeling from successive crises over debt and refugees, the loss of Britain is the biggest blow yet to 60 years of efforts to forge European unity in the wake of two devastating world wars.
Its leaders say they do not want to punish Britain. But with nationalist, anti-EU parties on the rise across the bloc, they cannot afford to give London generous terms that might encourage other member states to follow its example and break away.

Within 48 hours of reading the letter, Tusk will send the 27 other states draft negotiating guidelines. He will outline his views in Malta, where from Wednesday he will be attending a congress of centre-right leaders. Ambassadors of the 27 will then meet in Brussels to discuss Tusk’s draft.

The course of the Brexit talks is uncertain.
May has promised to seek the greatest possible access to European markets but said Britain will aim to establish its own free trade deals with countries beyond Europe, and impose limits on immigration from the continent.

152

[B]Intra-Day Moving News and Views
11 May 2017[/B] [I]03:06GMT[/I]

GBP/USD - 1.2936.. Sterling remains on the back foot in subdued Asian trading ahead of BoE Super Thursday where the central bank will announce its rate decision, minutes of MPC meeting and the release of BoE Quarterly Inflation Report at 11:00GMT, then subsequent press conference by Governor Mark Carney at 11:30GMT.

Analysts are divided what message BoE or Carney will convey to the market, although all expect BoE to stand pat on rate decision, some expect more hawkish MPC minutes with external member Michael Saunder to join his peer Kristin Forbes to vote for a hike.
However, the main event is Carney’s press conference. Despite market expectation of a possible hike later in the year, analysts are divided on future rate change due to downbeat UK GDP growth. So stay tune as one thing for sure, cable will pretty sharply be either moving up or down during the press conference.

For now, bids are noted at 1.2930-20 with stops below 1.2900, offers are tipped at 1.2960/70 n more above with stops above 1.3000. UK will release construction output, industrial output and manf. output ahead of BoE Super Thursday.