Global Market Watch - 6th May 2021
GBP/EUR was supported again as the market still perceives the relative outperformance of the UK when compared to the EU. The EU’s GDP forecasted growth rate is 3.7% for 2021, with the UK’s GDP forecast at the moment to grow by 4%. Interestingly the Bank of England is expected to increase its GDP forecast to 5% today, and this could help sterling. Final services PMI is released earlier and is expected to be 60.2. The full Scottish election results will probably be released by Saturday afternoon. Be aware that the pound could move on the exit polls.
EUR/USD slipped lower in relatively quiet trading conditions, with Eurozone final services PMI slightly as expected at 50.5. German factory orders have already been released rising by 3% and better than the 1.5% suggested. We have the ECB economic bulletin this morning and retail sales as well, with the latter expected to rise by 1.5% in March.
The USD was steady after Treasury Secretary Yellen’s interest rate comments and was followed by final Services PMI, which beat expectations of 63.1 at 64.7, although ISM Services PMI came in below the expected 64.2 at 62.7. The equity markets recovered ground lost yesterday and supported the USD as well.
The AUD has been very range-bound against the USD. We do expect strength later here, as the commodity markets are continuing to strengthen, although for today the AUD did push lower after China suspended its strategic economic dialogue with Australia.