Sterling surges following UK election results

Friday, May 08, 2015

Following the latest results, the Conservatives are forecast to win 325 seats in the UK election, enough to form majority. British PM David Cameron said that “it’s clearly a very strong night for the Conservative Party”. Shadow Chancellor Ed Balls loses his seat in Morley and Outwood by 422 votes to conservatives Andrea Jenkyns. Labour leader Ed Miliband has retained hit seat but he said that he is “deeply sorry” to candidates after “surge of nationalism in Scotland”. The London equity benchmark index rallied strongly this morning after gaining over 1.8% above 7,000. Sterling rebounded and surged towards 1.55 against the USD, showing strong upside momentum following the UK election results.

GBPUSD

GBPUSD Curncy (GBP-USD X-RATE)   2015-05-08 09-19-06

In the US, the main focus will be on the crucial nonfarm payroll data this afternoon. Following the recent decent US employment data (weekly jobless claims and Challenger layoffs), it is expected that the US economy added 228K jobs in April compared to 126K in March. The USD index has slightly rebounded hovering around 94.70 against a basket of currencies.

Germany’s industrial production fell unexpectedly by 0.5% in March missing analysts’ estimates of a 0.4% rise. German exports surged by 1.2% in March above expectations of a 0.4% increase, while imports climbed by 2.4% during the same period. The  DAX index opened higher this morning and gained over 0.7% in early trade heading towards 11,500. However, the euro remained under pressure hovering around 1.12 against the USD.    

Crude oil prices came under renewed pressure yesterday after the EIA report published a bearish outlook showing that the US oil demand will grow 1.7% in 2015, compared with a 6.3% gain in production. This morning, Brent front month futures held around $65 per barrel while WTI front month futures slid slightly lower below $59 per barrel.

 

Events for today:

0700

DE

Mar

Trade Balance

0700

DE

Mar

Industrial Production

0930

UK

Mar

Trade Bal & Non EU

1330

US

Apr

NF Payrolls

1330

US

Apr

Unemployment Rate

1500

US

Mar

Wholesale Inventories

All times UK Local Time

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