GBP Remains Vulnerable Ahead of Next Week’s Vote

European equity markets are expected to open on a positive note, with focus on Thursday remaining on the UK election, as well as the latest oil inventory data from EIA and a raft of other data from around the globe.

GBP Remains Vulnerable to Polls That Show May’s Lead Deteriorating

Sterling is likely to remain volatile over the next week as we approach the election on 8 June. Recent polls have shown that Theresa May’s lead has narrowed, in some cases quite considerably, which has sent the pound into a bit of a tailspin at times.

Commodities Diverge Ahead Of Trump’s Climate Accord Decision

The polls can be inconsistent at times though, as seen yesterday with the YouGov and Panelbase polls predicting very different outcomes, but the trend does appear to be one of May’s lead shortening. It may be worth remembering though that these same polls also underestimated the Conservative lead only two years ago.

Source – FT Poll of Polls

Could EIA Give Oil a Reason to Reverse Course This Afternoon?

Oil will be back in focus again on Wednesday as we await the release of last week’s inventory report from EIA. The release comes as oil continues to trade under pressure, despite last week’s agreement to extend the cuts by another nine months, and after API reported a substantial drawdown on Wednesday.

Running with the Yuan Bulls

While the market reaction to the report wasn’t muted, per say, I’m not convinced it fully sunk in either. Should EIA report a reduction in inventories in the region of the 8.67 million that API reported, it may offer some reprieve for oil as it would suggest the cuts are working. It would be the eighth consecutive drawdown and the largest since September.

Manufacturing PMIs, ADP Employment and More to Come Throughout the Day

There’ll be plenty of economic data being released throughout the day today, including manufacturing PMI reports from across Europe and the US, as well as jobless claims, productivity, labour costs and of course, ADP non-farm employment numbers, also from the US. The ADP number comes ahead of tomorrow’s jobs report and is expected to show 181,000 jobs being created in May.

For a look at all of today’s economic events, check out our economic calendar.

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam