A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.
UK In Focus
Share this story:
Richard Pontius Foreign Exchange Advisor
The U.K. is clearly the focus for today. The Bank of England’s Monetary Policy Committee (MPC) concluded its regularly scheduled meeting with an as expected, no change in policy. The nine-member committee is divided, especially when it comes to issues of inflation and spending. However, as has been the common theme among G-7 central banks, they remain committed to ensuring that the economy is solid. While noting that the economy is improving, the central bank confirmed that it won’t tighten monetary policy until there is clear evidence of a recovery. Regarding assessment of risk management considerations, the MPC said that it would “lean strongly against downside risks to the outlook.” Following the MPC announcement on policy, the pound sterling is lower from yesterday’s close against the dollar and, more notably, the euro.
In other economic news, the euro showed strength following Eurozone retail sales data that showed a larger-than-expected 2.7% rise during the month of March. As for the U.S., the major market event was the weekly release of initial jobless claims, which fell 92,000 for the first week of May to 498,000. Declines in initial jobless figures are encouraging and clearly on the right path. The data reflects substantially lower claims when compared with the monthly averages of 580,000 in April, 724,000 in March, 800,000 in February and 860,000 in January. Continuing claims, however, rose by 37,000 to 3.69million. Continuing claims fell by just 188,000 between March and April, but that paled in comparison to declines of 628,000 in March, 409,000 in February and 555,000 in January.
Tomorrow brings the all-important unemployment data from the U.S. Department of Labor. Nonfarm payrolls are expected to reflect sizable gains made during the month of April as the economy emerged from COVID-19-related restrictions. Analysts are calling for increases to nonfarm payrolls measuring between 850,000 and 1 million. The unemployment rate is expected to fall to 5.8% from March’s level of 6%. We expect the market to be fairly quiet today as participants await tomorrow’s jobs data.
Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!
Follow City National Bank on social media:
Non-deposit investment products:
Are not FDIC insured,
Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and
Are subject to investment risks, including possible loss of the principal invested.
This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.
Here's what this indicator is saying about US stocks right now. ACTIVE INVESTOR WEEKLY EDITION: January 21, 2022 View in a browser FIDELITY VIEWPOINTS ® WEEKLY EDITION: January 21, 2022 Bollinger band stock signal Here's what this indicator is saying about US stocks right now. Read more CHART OF THE WEEK Inflation and corporate consolidation US industries have become
Learn how to keep all your accounts—not just the ones at Fidelity—secure. November 18, 2021 View in a browser FIDELITY VIEWPOINTS ® WEEKLY EDITION: November 18, 2021 What to do after a data breach Learn how to keep all your accounts—not just the ones at Fidelity—secure. Read more What's ahead for your RMDs Make sure to take your required withdrawals this year, then start to plan ahead.