Sterling Hurt by Consumers Retrenchment, Greece on Watch, Canada CPI Due
Sterling expected to remain under pressure as UK mortgage approvals and credit data expected to remain subdued, Greece austerity vote in focus, Canada CPI beckons. New Premium trades on USDJPY, EURUSD, EURJPY, silver and more.
GBP continuous its tortuous week and given yesterdays data it doesnt look like it will get any better. Bad news out of the high street with administration orders for department store TJ Hughes and clothes retailer Jane Norman, as well as widespread shop closures for chocolate maker Thorntons and Carpetright, suggests that things are starting to tighten up for the consumer.
Todays mortgage approvals data for May is expected to remain at fairly low levels, around 46k as the housing market continues to remain tight.
Consumer credit is not expected to show much in the way of life either, with expectations of 0.4bn, down from Aprils 0.5bn, given that household spending for the fiscal year just ended showed the sharpest contraction since 1977.
Yesterday's rebound in the single currency has so far managed to remain below the 55 day MA at 1.4410 as markets factor in a yes vote at todays midday vote in the Greek parliament.
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The rally yesterday was also helped by ECB president Trichet more or less confirming that the ECB would raise rates by 0.25% at next weeks monthly meeting, when he confirmed the banks strong vigilance stance.
Given these factors and the fact that there appears to be broad agreement amongst EU leaders that the French bank rollover plan for Greek debt is the way forward there remains quite a lot of unease, and it is not hard to see why, when looking at what is unfolding outside the Greek parliament amongst the protestors.
There appears to be an alarming sense of complacency in the markets with respect to what is unfolding on the news screens in front of us, and even though the market could well get what it expects in the form of a yes vote, the feeling remains as to how the politicians will ever be able to implement the measures in the budget, given the apparent depth of opposition. Moving beyond a yes vote the markets will look towards the implementation vote, which also needs to be passed on Thursday this week, and that could be no less difficult.
Conflicting talk out of Europe about the existence of a Plan B yesterday also helped the single currency rise and if any of the votes turns out to be a no they sure will need one.
Canada CPI data for May is out at around the same time with expectations that prices will remain stable from Aprils numbers with a month on month rise of 0.3% and a year on year figure of 3.3%, though prices could well have fallen back given the recent decline in commodity prices.
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