Market Review - Fundamental Perspective - 27 April 2018

Global equities rallied yesterday, led by technology shares after strong earnings announcements. Geo-political tensions also improved overnight as North and South Korea held their first summit in over a decade, driving local equities higher. In FX, the USD Bloomberg Spot Index climbed to the highest level in 15 weeks
The SEK underperformed yesterday, falling to its lowest level since the end of the financial crisis, after the Riksbank again delayed plans to increase interest rates
GBPUSD has been falling this morning ahead of the release of preliminary UK GDP at 9.30. Given the BoE’s data dependency ahead of the MPC meeting in May, disappointments in data could pose downside risk to Sterling. In light of this, markets will also be focusing on speeches by BoE’s Haldane and Carney at 3.00 and 3.15, respectively
Our traders currently see GBPUSD support at 1.3660, while resistance lies at 1.4000. EURGBP support comes in at 0.8680 ahead of 0.8625, while resistance is at 0.8800
The ECB made neither policy announcements nor any changes to forward guidance at yesterday’s meeting. The focus of the ECB press conference was on the recent moderation of economic activity but the Governing Council still remains confident about the outlook for growth and inflation
Provided there are no negative surprises, Barclays Research believes “the ECB should be in a position to announce the tapering of the APP program in its July meeting”

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