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HiFX Financial Market Update

HiFXGBP surges after Tory win! Did you take advantage of the sharp rises in the market on the back of the landmark election result?

With sterling continuing its strength its not too late to talk to us about how you get more for your money!


In Europe, their PMI surveys suggest the second quarter has started on solid footing with Spain’s service sector growing at the fastest pace in 8 years
Since the ECB started their QE program inflation expectations have soared higher, helped further last week by a jump in oil prices, which have risen 50% since January
A real rollercoaster ride for GBP last week saw the currency get pulled from pillar to post through the UK election finishing the week near its recent highs.


David Cameron and the Conservatives swept to power with an outright majority leaving Miliband, Clegg and Farage waving their goodbyes!
On the economic data front the service sector shined in April notching its highest reading since August last year at 59.5, which reflects a potential growth rate of 0.8%. GBP finished the week on the front foot after the unexpected Conservative majority but the post-election euphoria may begin to dissipate in the coming days. Heavy levels of resistance around the 1.55/1.5600 area should be enough to contain any further advances and it looks like a period of consolidation is needed before we see a more concerted push higher.


In the US, the employment report came out in line with expectations with 223k jobs created, while last month’s data was revised even lower to just 85k (a 3-year low) and the unemployment rate improved to 5.4%. The trade balance jumped as imports surged by 7.7% pushing the trade deficit up by 43%, the largest since October 2008
A very strong week for Euro saw the currency hit its highest level since February. Unfortunately for the single currency it has a long way to go before it can relive the glory days of last year and with heavy levels of resistance below the 1.1500 area it looks like this current rally has run its course


In Australia last week, the RBA finally delivered their second rate cut this year, taking rates to a new record low of 2%. Governor Stevens reiterated the drag on the economy due to the steep fall in commodity prices and the still high A$. Retail sales rose 0.4% in March, slightly higher than forecast and the unemployment rate rose to 6.2% in March where 3k jobs were lost.
GBP/AUD tested the top of its recent range last week as Sterling strengthened.


In New Zealand last week, the unemployment rate rose unexpectedly to 5.8% in the first quarter as more people joined the workforce. Employment was up 0.7% from the previous quarter which was slightly below forecasts and down from the 1.2% rise in Q4.
GBP/NZD surged higher again last week with the Kiwi funder pressure due to increased speculation the RBNZ will cut rates.


GBP/ZAR remained towards the top of its range last week with the Rand under pressure alongside stocks and bonds. The pair remains in a wide range of 17.00-18.70 for now.
In South Africa last week, business confidence recovered slightly in April, rising from a 3-month low of 89.1 to 89.9


GBP/CAD spiked higher last week with Sterling strength outweighing the Loonie’s oil price driven gains. In Canada last week, the Ivey PMI rose to 58.2 last month from 47.9 in March, the fastest rate in 7 months, easing concerns over the economy. Building permits jumped 11.6% in March, the biggest gain since September and far outstripping forecasts.


In Switzerland last week, consumer prices fell at a faster annual pace of 1.1% in April, highlighting the deflationary pressures from the soaring Swiss Franc. Consumer confidence was unchanged at -6 in the current quarter, reflecting concern about the strong Franc.
GBP/CHF bounced back from a 3-month low last week as the surprise election result saw Sterling strengthen across the board, having broken below 1.40 last week.

For info please contact agents@hifx.co.uk or call +44 (0)1753 752740.

W: www.hifx.co.uk

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