GBPUSD news - page 82
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The Bank of England's King:"Without reform ... another crisis is certain" More accurately, ex-Bank of England Governor Mervyn King, in an extract from his new book ("Harry Potter and the King of the BoE') "Without reform of the financial system, another crisis is certain, and the failure ... to tackle the disequilibrium in the world economy makes it likely that it will come sooner rather than later"
Even more darkly ...:
Reuters have more
UK 1 year inflation expectations rise to 1.5% vs 1.2% prior Latest Citi/YouGov inflation poll
Not market moving but price expectations feature in many a central banks decisions
February 2016 UK Markit/CIPS manufacturing PMI 50.8 vs 52.2 exp
Details from the February 2016 UK Markit/CIPS manufacturing PMI data report 1 March 2016
Ouch! That's the lowest since Apr 2013.
Problems afoot with capital and consumer sectors showing new biz decline. That's not good for both domestic and export markets. Export orders were lower for the second month. Employment was also down for the second month on the trot.
Input prices were still well down and they are being passed on via lower output prices
Rob Dobson at Markit says;
"The near-stagnation of manufacturing highlights the ongoing fragility of the economic recovery at the start of the year and provides further cover for the Bank of England's increasingly dovish stance.
The breadth of the slowdown is especially worrisome. The domestic market is showing signs of weakening while export business continued to fall. Price pressures also remained firmly on the downside, with the survey signalling input costs falling at a double-digit annual pace and average factory gate selling prices showing a further decline. A lot of this is driven by the ongoing weakness of global commodity prices. However, there are also signs that weaker growth is driving up competition between manufacturers to secure new business and among their suppliers too.
While these factors will help keep a lid on inflationary pressures, it is worth noting that the recent sharp drop in sterling came late in the survey collection window and so is not yet fully reflected in the results. Although sterling's drop will hopefully boost exports, the likely increase in import costs in coming months will be unwelcome to manufacturers, especially given the imminent introduction of the new National Living Wage."
Not a good report on top of an already soft sector. GBPUSD hit 1.3909 and is back at 1.3924
source
Possible fall to 1.35 might be expected.
Cable climbs back through 1.4000 as EURGBP gives up 0.7750 support Euro supply has seen demand for GBPUSD return 0.7750 has held up well in the past 24 hours launching a rally to 0.7814 but fresh euro selling has now seen lows of 0.7742.
GBPUSD has risen to 1.4015 as I type just shy of the offers around 1.4020 that capped the rally yesterday and as I've been highlighting again today.
The 1.3900 demand was also noted earlier and in these current range trading times we can expect good supply into 1.4040-50 confirmed by tech res too.
Currently 1.4020 and worth selling some here and above 1.4050 but caution advised with EURGBP still looking to head lower.
The two pairs as ever are joined at the hip.
February 2016 UK Markit/CIPS services PMI 52.7 vs 55.1 exp
That's going to do the pound rally no favours. That's the lowest since March 2013. The folks at Markit say that Q1 GDP could drop to 0.3%. Brexit was said to be one of the main reasons behind the fall in activity.
"A maelstrom of sluggish global economic performance and relatively subdued business confidence resulted in a downbeat message in February. The combined pressures from uncertainties around the EU referendum, China and Middle East crowded out any strong optimism for the future." Said CIPS CEO David Noble.
GBP/USD: Pound Close to Daily High on Weak Dollar The pound had been slowly rising on Thursday, rebounding from lows seen after disappointing PMI numbers hurt the pound.
The GBP/USD pair was trading 0.63% higher at $1.4164, reaching a daily high at $1.4189 during the US session.
In the UK, the services PMI came in at 52.7 in February, significantly lower than the forecast of 55.1 and the 55.6 seen in the previous month. Right after the release, the pound was 0.29% down at $1.4035, its daily low.
This came after news that house prices in February were below expectations in the latest Halifax survey, remaining at 9.7% 3m/y. The monthly change was -1.4% after January's 1.7%.
Later in the day, Bank of England chief economist Andy Haldane will give a lecture at the Manchester Business School on corporate governance.
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GBP/USD Weekly: Pair Surges on Short Covering, Despite Weak UK Data The week was again very volatile but the trend was very clear and obvious - bullish. As the Brexit panic eased a bit, investors started to cover their shorts on sterling and the pound therefore surged, adding nearly three big figures and closing at $1.4228.
On Tuesday, the US dollar failed to capitalize on positive US macro news and the EUR/USD pair was trading with no obvious direction around $1.0850. The ISM manufacturing report for February printed 49.5, up from 48.2 booked in January. Moreover, the employment subindex improved to 48.5 from 45.9 and the new orders subpart stayed at 51.5.
The inflation subindex of prices paid jumped to 38.5 from 33.5. In addition, the manufacturing PMI improved slightly as well, printing 51.3 in February.
According to February's ADP employment report, the US economy created 214,000 jobs in the previous month, higher than the revised 193,000 payrolls added in February and the economy is still maintaining a stellar pace of job growth.
Thursday brought disappointing jobless claims, reaching 278,000 new people applying for unemployment aid in the week ending February 27. Later in the session, the services PMI, published by Markit, showed a third month of deceleration, reaching 49.7 points, while the ISM non-manufacturing composite gauge accelerated to 53.4 during the month of February.
According to the latest Bureau of Labor statistics release, the US economy added 242,000 jobs in February, more than the 195,000 estimated and up from the upwardly revised 172,000 in January. The jobless rate remained at 4.9%.
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Carney: BoE Has Tools to Fulfill Mandate in Case of Brexit Carney reiterated that the BoE's analysis does not provide a comprehensive assessment for or against the change to the status quo with respect to the UK's membership in the European common bloc .
"Monetary and financial stability are foundations of very important determinants of economic outcome. They are not assuming the determinants of the economic outcomes. So our comments and analysis do not provide a comprehensive assessment of the economic case for the status quo, or the changes to the status quo with respect the the European Union," Carney told the lawmakers.
He said the central bank will therefore be making no recommendation with respect to the decision of whether or not the UK should remain in the common bloc.
Carney also said that remaining in the EU may pose a risk on the back of ongoing problems in the euro zone. At the same time, he reiterated that the openness of Britain economy's offers more economic dynamism, partly referring to the October 2015 speech he gave at Oxford.
Carney also said the EU deal which Prime Minister David Cameron secured in Brussels last month may improve stability of the banking union within the common bloc and thus help enhance financial stability in Britain.
Carney's Warning Halts Pound's Longest Run of Gains in 8 Mths The British pound fell versus the dollar from its recent two week top on Tuesday, snapping its longest winning streak in more than eight months after Bank of England (BoE) Governor Mark Carney explicitly warned that Britain's potential exit from the European Union would hurt the City of London.
Sterling trashed 0.39% to $1.4207 against the greenback during the afternoon European session, stepping down from $1.4284 snatched late on Monday, its highest since February 22.
On Monday, the so-called cable pair booked what was already its sixth straight daily gain, the longest period since June 19 according to Bloomberg data.
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