29 Oct 2013
EUR/GBP pulling back
FXstreet.com (London) -EUR/GBP has made a high of 0.8588 but has dropped back to 0.8565 in New York.
From the data front, research teams at TD Securities are saying, “IFO business climate was weaker than expected, falling from 107.7 to 107.4 in October, against the consensus forecast for a small gain to 108.0. The weakness was mostly in the expectations component, which fell from 104.2 to 103.6 while current assessment was little changed at 111.3. Overall, this was in line with what the PMIs suggested yesterday, but did have a small downside impact on EUR. Eurozone MFI data was roughly flat, with slightly better household lending, while the contraction in lending to corporations moderated. Overall, nothing to shift the ECB in either direction. The ECB announced that banks will repay just €1.76bn of 3-year LTRO funds next week (a smaller amount than the roughly €3bn the market had been expecting) with 7 banks choosing to make repayments. This smaller repayment has seen short-term European rates fall a little from their highs. GBP Q3 GDP came in at 0.8% Q/Q, exactly in line with consensus, and picking up a bit from the 0.7% growth rate in Q2. The details of the report were also strong, and made for the second straight quarter where every single major sub-sector (construction, agriculture, industry, and services) recorded positive growth. With broad-based growth and strong Q3 survey data, it also looks like there is decent momentum heading into Q4 as well, and H2 growth should be in line with the 0.7% average pace that the BoE indicated in the October MPC minutes. The bigger issue going into the Inflation Report on 13 November is what the MPC does with its unemployment rate forecasts. Recent comments from the MPC suggest that it is nowhere near ready to throw in the towel on its expectations for eventual stronger productivity growth, so we wouldn’t expect to see the forecast for when the unemployment rate hits the 7.0% threshold brought forward by any more than one quarter, despite slightly better growth outcomes”.
EUR/GBP Levels
The 20 DMA is 0.8467, the 50 DMA is 0.8464 and the 200 DMA is 0.8535. RSI (14) 69.66. Supports are ascending from 0.8443, 0.8465, 0.8494 and 0.8520. Spot is currently 0.8567. Resistances are 0.8572, 0.8603, 0.8651 and 0.8667.
From the data front, research teams at TD Securities are saying, “IFO business climate was weaker than expected, falling from 107.7 to 107.4 in October, against the consensus forecast for a small gain to 108.0. The weakness was mostly in the expectations component, which fell from 104.2 to 103.6 while current assessment was little changed at 111.3. Overall, this was in line with what the PMIs suggested yesterday, but did have a small downside impact on EUR. Eurozone MFI data was roughly flat, with slightly better household lending, while the contraction in lending to corporations moderated. Overall, nothing to shift the ECB in either direction. The ECB announced that banks will repay just €1.76bn of 3-year LTRO funds next week (a smaller amount than the roughly €3bn the market had been expecting) with 7 banks choosing to make repayments. This smaller repayment has seen short-term European rates fall a little from their highs. GBP Q3 GDP came in at 0.8% Q/Q, exactly in line with consensus, and picking up a bit from the 0.7% growth rate in Q2. The details of the report were also strong, and made for the second straight quarter where every single major sub-sector (construction, agriculture, industry, and services) recorded positive growth. With broad-based growth and strong Q3 survey data, it also looks like there is decent momentum heading into Q4 as well, and H2 growth should be in line with the 0.7% average pace that the BoE indicated in the October MPC minutes. The bigger issue going into the Inflation Report on 13 November is what the MPC does with its unemployment rate forecasts. Recent comments from the MPC suggest that it is nowhere near ready to throw in the towel on its expectations for eventual stronger productivity growth, so we wouldn’t expect to see the forecast for when the unemployment rate hits the 7.0% threshold brought forward by any more than one quarter, despite slightly better growth outcomes”.
EUR/GBP Levels
The 20 DMA is 0.8467, the 50 DMA is 0.8464 and the 200 DMA is 0.8535. RSI (14) 69.66. Supports are ascending from 0.8443, 0.8465, 0.8494 and 0.8520. Spot is currently 0.8567. Resistances are 0.8572, 0.8603, 0.8651 and 0.8667.