In this article, the Barry Norman at FXEmpire.com shares his fundamental analysis for this currency pair, how it was impacted by the Greek debt crisis, and he lays out key upcoming economic events, as well as the dates, times, and countries for the next government bond auctions.
Analysis and Recommendations:
The EUR/GBP gained 31 points to 0.7256 as the euro recovered on hopes of a deal in Greece. The pound remained weak after UK labor data and elections continue to weigh on the currency. At a meeting in Brussels on Thursday, European Union leaders urged Greek Prime Minister Alexis Tsipras to submit a more concrete reform plan so that bailout talks can speed up.
Mr. Tsipras met with German Chancellor Angela Merkel, France’s President Francois Hollande and European Central Bank President Mario Draghi as he sought funds to keep Greece afloat. Greek 10-year bond yields fell on Friday after jumping to their highest level in almost two years Thursday after the ECB granted Greek officials only part of their request for more emergency funding.
UK sterling weakened on Thursday following dovish comments from Bank of England’s chief economist who said the chances of a rate rise or cut are evenly balanced.
The FT reported that Andy Haldane, chief economist at the central bank, said in a speech on Thursday that that while there is not an immediate case for a move in either direction, the chances of a rate rise or a rate cut are broadly evenly balanced.
Haldane also noted that while the risks to inflation are two-sided, it is his personal view that risks are skewed to the downside.
Friday’s Economic Releases Actual vs. Forecast:
Cur. |
Event |
Actual |
Forecast |
Previous |
JPY |
Monetary Minutes |
|
|
|
AUD |
RBA Governor Stevens |
|
|
|
EUR |
German PPI (MoM) (Feb) |
0.1% |
0.2% |
-0.6% |
CAD |
Core CPI (MoM) (Feb) |
0.6% |
0.5% |
0.2% |
CAD |
Core CPI (YoY) (Feb) |
2.1% |
2.1% |
2.2% |
CAD |
Core Retail Sales (MoM) |
-1.8% |
-0.4% |
-2.3% |
CAD |
CPI (MoM) (Feb) |
0.9% |
0.7% |
-0.2% |
CAD |
Retail Sales (MoM) (Jan) |
-1.7% |
-0.7% |
-1.8% |
Upcoming Economic Events That You Should Be Monitoring:
Monday, March 23, 2015
Cur. |
Event |
Actual |
Forecast |
Previous |
GBP |
CBI Industrial Trends |
|
|
10 |
USD |
Existing Home Sales |
|
4.95M |
4.82M |
USD |
Existing Home Sales |
|
2.5% |
-4.9% |
Government Bond Auctions
Date Time Country
Mar 23 12:00 Norway Details bond auction on 25 Mar
Mar 23 12:00 Belgium Auctions OLOs
Mar 23 11:30 Germany Eur 1.5bn 12M (March 2016) Bubill
Mar 23 17:30 Italy Announces details of CTZ/BTPei on 26 Mar
Mar 24 09:00 Holland Eur 5bn new Jul 2025 DSL auction via DDA
Mar 24 19:00 US Auctions 2-yr Notes
Mar 25 11:03 Sweden Holds bond auction
Mar 25 11:15 Norway Holds bond auction
Mar 25 17:30 Italy Announces details of BTP/CCTeu on 30 Mar
Mar 25 19:00 US Auctions 2-yr FRN, plus 5-yr Notes
Mar 26 11:10 Italy Auctions CTZ/BTPei
Mar 26 19:00 US Auctions 7-yr Notes
By Barry Norman at FXEmpire.com