Daily Market Update

Quiet May Day ahead of Fed Meeting

May 01, 2019

The U.S. Dollar remained mostly quiet overnight after seeing a day of recovery for some of its major counterparts.

Overview

Indeed The Euro was helped by rosier figures than forecast when it comes to assessing the region’s health in Q1.

Today, most European markets are closed, thus Euro and others will be at the mercy of an eventful Wednesday in America that already started on the very optimistic side with ADP Employment Change revealing an added 275K jobs in April when only 180K were expected. Additionally, the prior figure was revised upward from 129K to 151K. Labor markets are healthy and that will keep the buck from sinking much at the moment.

We also await the FOMC Meeting decision that will be announced at 2PM to be followed by a press conference with Chairman Jerome Powell. Overall, April signified a rise for the greenback of about 0.8% per the Bloomberg Dollar Spot Index. Its surge against emerging and commodity-based currencies was much higher as the global markets feared slowdown.

 

What to Watch Today…

  • FOMC MEETING & PRESS CONFERENCE 2PM
Complete Economic Calendar can be found here.

 

CAD

The Canadian Dollar was able to recover some ground yesterday afternoon after falling as a result of very underwhelming GDP figures showing contraction for Q1. April was merciful to the “Loonie” primarily because oil-price flows have been beneficial.

Following a depreciation of over half a percent in April, we see the currency as very vulnerable, but it should react positively to any indicators and numbers that from now on demonstrate some expansionary activity in our neighbor to the north. If oil prices stay relatively strong and the economy improves in the second half of the year, CAD will move towards our forecast of strengthening.

 

GBP

The Pound is up once more on hopes that Parliament and the Prime Minister can achieve something going into the summer. Brexit is again a major concern, not just economically, but in terms of maintaining the United Kingdom from falling apart if not strategy is set in place that satisfies all the nations. Scotland and its first Minister Nicola Sturgeon are considering measures to once more seek independence based on fundamental disagreement on leaving the European Union’s single market.

The Scots are hoping that the Labour Party pressures towards a second referendum, an item on the agenda of a meeting yesterday amongst Labour leaders who are feeling they could get more say in the process as Conservatives are split. Nevertheless, they want to push for a second vote only after doing all they can in a deal-making approach at least the next few weeks. Expect Sterling to struggle to move much one way or the other after seeing April losses of just 0.5% unless there is a surprise.

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