GDP Surprises Propel Pound, Indices Eye New Highs

By Tomasz Wisniewski|

Published: May 10 2024, 06:38 GMT+0

GDP Surprises Propel Pound, Indices Eye New Highs

Good morning traders,

As we head into the end of the trading week, let’s recap Thursday’s key developments and look ahead to what Friday has in store for the markets.

Thursday’s Market Recap:

Thursday was a significant day for market watchers, highlighted by the Bank of England’s decision to hold interest rates steady at 5.25%. Despite the rate decision, which is at a 16-year high, there was no substantial movement in the pound as the market had largely anticipated the outcome. However, the absence of dovish signals from Governor Bailey left some traders questioning the future direction of UK monetary policy.

In the U.S., the labor market data released showed unemployment claims rising to 231,000, surpassing expectations and suggesting potential volatility in the labor market. This figure was higher than anticipated and put some downward pressure on the American dollar as it raised concerns about economic slowdown.

Friday’s Economic Forecasts and Market Open:

Moving into Friday, the market reacted positively to the UK’s GDP data released earlier this morning, which showed an unexpected rise to 0.4%, surpassing the forecasted 0.1%. This robust economic indicator has provided a bullish push to the British pound, which is noticeable in its performance against major currencies.

Today, traders should also keep an eye on Canadian employment data and the preliminary University of Michigan Consumer Sentiment Index from the U.S. These figures will provide further insights into the North American economic climate and could influence market movements as the day progresses.

Current Situation on the Charts:

On the commodities front, oil and precious metals saw significant movements. Oil prices are continuing their recovery from recent lows, a trend that began earlier this week. After breaking past the $79 mark, analysts now speculate whether this could signify the beginning of a new bullish trend for oil.

Silver and gold have also been performing well, with silver notably outperforming gold in terms of price gains. This trend highlights investor interest in silver as a potentially undervalued asset in the current market.

Indices and Currencies:

Indices in Europe and the U.S. have shown resilience, with many pushing towards new highs, supported by positive sentiment across global markets. The DAX, in particular, tried to push to new highs yesterday, reflecting a strong bullish sentiment among European investors.

Currencies today are seeing mixed movements, with the British pound gaining strength from positive GDP data, while the American dollar is looking to stabilize after yesterday’s dip.

Looking Ahead:

As we wrap up the week, today’s Canadian job data and the U.S. consumer sentiment index will be pivotal in setting the tone for the close of trading. These economic indicators are crucial for traders to gauge the market’s direction as we head into the weekend.