Sterling retreating after doubts for rate hike in May

1. The pound retreated yesterday after BoE governor Mark Carney shed doubts about a much anticipated rate hike in May.
2. Carney’s comment that there are also “other meetings” this year, completed the puzzle of bad UK financial data releases over the past three days relating to inflation, employment and retail sales.
3. The market reacted negatively to the comments and cable dropped by some 100 pips.
4. On other news the EU seems to be rejecting a possible UK solution to the Irish border issue and the UK government auditor predicted that the Brexit bill could be exceeded by some 35-39 Billion pounds, both deepening political uncertainty.
5. Should there be further negative headlines about the BoE May rate hike or Brexit we could see the pound weakening even further.

Progress for NAFTA

1. Canadian foreign minister stated that there was good progress on NAFTA key issues.
2. The progress seems to be related to the issue of car making and what constitutes an American car.
3. All sides seem to push for a new NAFTA agreement before July 1st in order to avoid clashing with Mexican elections, and timeframes such as mid to end May for an acceptable agreement could be feasible.
4. Any further positive headlines regarding NAFTA could support CAD.

Today’s other economic highlights

• Germany: PPI for March, Survey: +0.2% mom Prior: -0.1% mom, 06:00 (GMT), could strengthen the EUR
• Canada: CPI for March, Survey:+2.4% yoy Prior:+2.2% yoy, 12:30 (GMT), could strengthen CAD
• Core BoC CPI for March, Survey:+1.5% yoy, Prior: +1.5% yoy, 12:30 (GMT), could strengthen CAD
• Retail Sales for March, Survey: +0.3% mom, Prior: +0.3% mom, 12:30 (GMT), neutral for CAD
• Core Retail Sales for March, Survey: +0.3% mom, Prior: +0.9% mom, 12:30 (GMT), could weaken the CAD
• Eurozone: Preliminary Consumer Confidence for April, Survey: -0.20 Prior:+0.10, 14:00 (GMT), could weaken EUR
• US: Baker Hughes Oil Rig Count, Survey: N/A, Prior: 815, 17:00 (GMT), any reading below 815 could weaken Oil Prices
• Speakers: BoE MPC member Saunders (09:30, GMT), German BuBa President Weidmann (11:30, GMT), Chicago Fed President Evans (13:40, GMT),
• Riksbank Governor Ingves (15:00,GMT) and FOMC member Williams (15:15, GMT) speak.

IronFX Daily Report – April 20th