BoE Governor Carney and the Pound in the Spotlight

Earlier in the Day:

Economic data through the Asian session this morning was on the lighter side, limited to trade and business confidence figures out of New Zealand.

For the Kiwi Dollar, May’s trade surplus widened from a revised NZ$193m to NZ$294m, month-on-month, coming in ahead of a forecasted narrowing to NZ$100m, while the trade deficit narrowed from a revised NZ3,830m to NZ$3,600m year-on-year, which was better than a forecasted narrowing to a NZ$3,743m deficit.

The Kiwi Dollar moved from $0.68513 to $0.69569 upon release of the figures.

Business confidence deteriorate in June, offsetting any upside from the trade figures, with June’s ANZ Business Confidence falling from -27.2 to -39.0.

The Kiwi Dollar moved from $0.68472 to $0.68352 upon release of the figures.

Elsewhere, the Japanese Yen continued to find support, rising by 0.28% to ¥109.75 at the time of writing, risk aversion continuing to drive appetite for the safe havens in spite of modest gains in the U.S equity markets overnight.

For the Aussie and Kiwi the sell-off continued, the Aussie Dollar down 0.27% to $0.7374, with the Kiwi Dollar down 0.61% to $0.682, this morning’s business confidence figures weighing ahead of tomorrow’s RBNZ monetary policy decision.

In the equity markets, it was another day in the red, the CSI300 and Hang Seng sliding by 2.03% and 1.82% respectively, while the Nikkei and ASX200 closed out with 0.31% and 0.03% losses on the day, trade war jitters and concerns over the global economic outlook weighing on appetite.

The Day Ahead:

For the EUR, key stats through the day are limited to this morning’s jobseeker numbers out of France that are unlikely to have a material impact on the EUR through the day, the EUR in limbo ahead of the EU Summit and a heavier second half of the week, with prelim inflation and unemployment numbers out of Germany in focus.

At the time of writing, the EUR was flat at $1.1648.

For the Pound, with no material stats scheduled for release through the day, focus will be on the BoE’s financial stability report and Carney commentary, any hint of inflationary pressures and positive outlook in the UK economy being a positive for the Pound as the markets look for any signs of a near-term rate hike following the 6-3 vote count in the June MPC meeting.

Brexit will likely remain a feature however, with a cautious stance not unreasonable until there is a better picture on how Britain will be leaving the EU.

At the time of writing, the Pound was down 0.15% to $1.3205, with BoE Governor Carney the key driver for the day.

Across the Pond, stats through the day include May’s durable goods orders, trade figures and pending home sales. While there will be some interest in the goods trade balance figures as the U.S administration wages a trade war, core durable goods orders will likely be the key driver, forecasts being Dollar positive.

Outside of the stats, FOMC member commentary will also need to be considered, with members Quarles and Rosengren scheduled to speak through the day.

At the time of writing, the Dollar Spot Index was up 0.01% to $94.686, with the Oval Office and today’s stats the key drivers through the day, the Dollar finding some much needed support early on in the day.