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Poor retail sales drops GBP/USD and GBP/EUR


Good morning,


GBP/EUR opened yesterday morning at 1.12, The UK then released their retail sales figures which dropped 0.8% m/m in September which was more than expected of 0.7%. Off the back off the poor data the price dropped to 1.1120. There has been much speculation of late that the UK may put interest rates up in November but this figure may pour cold water on that possibility. GBP had a bad end to the day dropping down to a low of 1.1090. The price has pulled back slight this morning and is trading in the low 1.11's

The Pound was one of the worst performers on Thursday affected by the UK data. GBP/USD opened around the 1.3220 area to then moving down to a two-week low of 1.3128. The pair managed to hold around this area later on in the day beside the US bringing out their positive Initial and continuing Jobless claims which came out a lot better than expected, 222K against expected 240K.

EUR/USD performed well yesterday heading through the 1.18 handle. The Euro has outperformed the US Dollar second day in a row despite political uncertainty in Spain wanting to go independent moving 1.25% with a weekly high of 1.1860. Little data out today but the US will release their Existing Home Sales at 15:00 this afternoon.

Fact of The Day

Scientists finally concluded that the chicken came first, not the egg, because the protein which makes the egg shells is only produced by the hen.

Have a great weekend.





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Underlying issues around GBP continue


Good morning,


GBP/EUR was stuck in the 1.1200’s for the morning session and positive Average Earnings Index 3m/y was unable to give sterling the boost is desperately needs. At 1pm prices dropped below 1.1200 to 1.1180 which is not a big move but psychologically not good. Currency analysts at JP Morgan have upgraded their short- and medium-term forecasts for Pound Sterling but the American banking giant is sceptical of the Bank of England’s intent and its ability to sustain a tighter monetary policy over any meaningful period of time, suggesting broader risks around the Pound are still to the downside.

GBP/USD traded at 1.3150 ahead of the major event of the day, UK employment data for September. The pair spiked higher to 1.3175 with the a mixed employment report, as average hourly earnings, excluding bonus and in the three months to August, rose by more than expected, up 2.1%, while including bonus, rose to 2.2% from previous 2.1%. The unemployment rate remained steady as expected at 4.3%, while the number of people filing for unemployment benefits rose by 1.7K against the 1.0K expected. GBP/USD did drop to 1.3139 and by 4pm the price had made its way to 1.3177.

EUR/USD pair regained some ground as the USD suffering a setback from disappointing housing data just released. According to the official report, housing starts in September fell to its lowest in a year amid the hurricanes that hit the country back then disrupting construction. Housing starts decreased 4.7% to a seasonally adjusted annual rate of 1.127 million units, while building permits were 4.5% lower, to 1.215 million, both figures well-below market's expectations. The EUR/USD pair bounced from a daily low of 1.1729, trimming all of its daily losses to 1.1773.

Fact of The Day

On april 18 1930, the BBC annouced, “there is no news today” and played piano music instead

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Brexit negotiations should accelerate after May and Juncker Brussels meeting


Good morning,

GBP/EUR continued to trade in the 1.12's through out Monday. Monday brought fresh news to the Brexit negotiations with an unscheduled attempt by Prime Minister Theresa May to push talks forward with a trip to Brussels being made, however Downing Street say the meeting was in “the diary for weeks”. Brexit negotiations should "accelerate over the months to come," says a joint statement from the UK prime minister and the president of the EU Commission. Theresa May and Jean-Claude Juncker met in Brussels yesterday for a dinner they called "constructive and friendly". The meeting comes after the latest round of negotiations, where the EU's chief negotiator Michel Barnier said the two sides had reached "deadlock".

Having spent most of the day pressuring the 1.3300 level, GBP/USD fell to a fresh daily low of 1.3240 following the release of the US NY Empire manufacturing index for October, which largely surpassed market's expectations, up to 30.2 from previous 24.4.

The EUR/USD pair traded just above the 1.18, up from a daily low of 1.1780, as the dollar was generally lower against most of its major rivals in early London trading. The EUR/USD was hit by headlines indicating that the German Social Democrat party beat Angela's Merkel ruling one in Lower Saxony, and comments from Fed's head Yellen, offered a confident outlook on inflation and the economy. Another factor weighing on the EUR is the situation in Spain, as Catalonia President Carles Puigdemont avoided to clarify whether he declared independence or not, and asked for a two-month window, whilst the central government, through Spanish Vice President/ Deputy PM, Soraya Saenz de Santamaria, answered that they are still waiting for an answer that should be delivered no later than early Thursday.

Fact of The Day

There are only 8 people left on the Earth who were born in the 1800s. When they die all humans on earth will be from the 1900s and later.

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GBP pulls back some of its losses from early last week


Good morning,

GBP/EUR opened at 1.1140 last Monday morning with Sterling pushing higher to 1.1230 with good UK like-for-like retail sales results coming out higher than previous. GBP held steady around the 1.12 region as UK released good industrial and manufacturing figures. On Thursday the EU released their Industrial production where we saw their figures come out at 3.8% expected 2.5% pushing GBP/EUR down 1% to a near monthly low of 1.1067. Shortly after GBP recovered as MPC member Haldane spoke hinting that an interest rate hike could be in store for the UK in November pushing prices back up to 1.12. The pair continued to climb on Friday pushing above 1.1250 giving a weekly gain of 1.20%.

Sterling also had a good week against the US Dollar opening last week at 1.3080 and quickly rising to 1.3180 on Monday during a thin market as it was US Columbus day. On Tuesday GBP managed to gain more value with UK Industrial and Manufacturing results came out better than expected pushing to 1.3220. On Thursday GBP lost most of it's weekly gains as it dropped from 1.3260 back down to 1.3120 on the back of BoE credit conditions survey for Q3 and Brexit negotiations headlines. The BoE survey showed that default rates on credit cards and other unsecured lending are on the rise whilst unsecured lending fell to its fastest pace since 2009. GBP managed to recover from the drop as we saw the US release poor CPI and Retail figures allowing GBP/USD to trade above 1.33 a monthly high.

EUR/USD moved in an uptrend all week last week. The pair opened at 1.1740 gaining on the back of overall positive EU data released throughout the week. On Thursday the Euro lost value from a fresh-two week high of 1.1879 down to the 1.1850 region on the back of US data coming in positive fuelling the US Dollars short term strength. Weekly unemployment claims for the week fell to 243K against expected 251K. EUR/USD opens this morning just below 1.18.

Fact of The Day

City birds have learned to line their nests with Cigarette butts in order to ward of parasites, as burnt nicotine work as an insecticide to ward off mites, lice and fleas.

Have a great day.





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Brexit concerns weighing on GBP again


Good morning,

GBP lost more value yesterday against the Euro as the Euro remains a better bid than Sterling due to continued sentiment over Brexit. The Euro was supported with a rally after the catalan regional government changed their views on declaring independence from Spain. With PM May failing to impress again speaking on a radio show yesterday where she was unable to be definitive over questions of her true support of Brexit. Sterling lost over half a percent throughout the day moving from 1.1180 down to 1.1120. An EU chief negotiator has said there is a disturbing deadlock in the Brexit talks, this is clearly limiting any upside potential for GBP/EUR.


USD dropped yesterday after the release of the FOMC minutes. The pair climbed to 1.3227 as according to the minutes many Fed officials saw another rate hike was notwarranted this year while at the same time they were concerned about low-inflation being not permanent. Today FOMC member Brainard and Powell will speak after lunch with the release of their monthly budget statement with which expected to have a positive impact.


EUR/USD pair gained traction yesterday in the late session pushing higher to a two-week top of 1.1871 from the daily lows of 1.1795. The Euro gathered some strength as USD struggled to hold when the FOMC minutes was released with worrying concerns that low inflations maybe not be due to temporary factors and said it would be appropriate to delay hikes until they see proof of a pick-up.


Fact of The Day


During World War 2 in a battle of Saipan, the Medal of Honour recipient Thomas Baker was wounded, and he insisted that he be left behind with a pistol loaded with 8 bullets. When American forces retook over the position, they found him dead holding an empty pistol with 8 Japanese lying dead around him.





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