Global equity markets generally rose yesterday on the back of easing US-China trade tensions after Chinese President Xi Jinping’s relatively conciliatory speech on Tuesday. However, risk assets came under pressure overnight on concerns of a possible US military action in Syria in light of the recent alleged chemical weapons attack
In FX markets, G10 pairs traded in a relatively tight range whilst in EM, RUB and TRY continued to underperform driven by US sanctions on Russian entities and geo-political tensions.
GBPUSD continued to rise throughout yesterday’s session mainly driven by general USD weakness. Today’s focus is on UK industrial production at 9.30 which could induce some short-term volatility.
Our traders currently see GBPUSD support at 1.4150 ahead of 1.3965, while resistance lies at 1.4250-75. EURGBP continues to trade within the range of 0.8695-0.8730 and within a wider range of 0.8665-0.8800.
Looking to the day ahead, the key data to look for is US CPI where Barclays Research expects a small decrease in headline CPI (2.3% y/y) and an increase in core inflation (2.1% y/y).
The minutes of the March FOMC meeting will also be closely watched by investors and Barclays Research expects that "...comments about trade protectionism and views on the balance of risks to the outlook could garner market interest..."