On Friday data on UK PMI Services in April surpassed the expectations, 52.9 vs. forecast for 52.5. US Nonfarm Payrolls in April grew 165K vs. expectations for 146-155K. The pound rose 40 points. The hint about QE3 cut was made by Federal Reserve Bank of Richmond President Jeffrey Lacker. He voiced opposition to bond purchases by the Fed, saying the buying probably won’t spur growth beyond 2 percent while making an exit from stimulus more challenging. “The benefit-cost trade-off associated with further monetary stimulus does not look promising,” Lacker said today in a speech in Richmond, Virginia. “The Fed seems to be unable to improve real growth, despite striving mightily over the last few years, and further increases in the size of our balance sheet raise the risks associated with the ‘exit process’ when it’s time to withdraw stimulus.” If the idea is accepted positively the market drop (at least a short-term one) will not be observed.
Today is a holiday in the UK, the data on US is not published today. Thus, the day will be characterized with low volatility in the area of 1.5545 (the high of April 29) – 1.5615 (the resistance of trendline on the H4).
