For the majority of the European trading session Friday seemed to be a day for the euro. The common currency has been supported by spectacular inflation data. The US received a mixed bag with a tint of a disappointment. However, it was a pure disappointment for the GBP and yet the British currency is the G10 winner as we move towards the late part of the US trade. 

The Q1 UK GDP was at just +0.3% q/q as services lagged behind. That marks a slowdown from 0.7% and was below expectations at +0.4%. So why is the GBP a G10 winner today, up 0.4% against the greenback and nearly 0.6% vs the yen? Maybe some other releases? No quite: both BBA Loans and Index of Services came out below the consensus. Yet the GBPUSD keeps surging following a stunning call for snap election from the PM May. While this snap elections has been tagged as a positive for the GBP (strengthening negotiating position) the market might be seeing a reduction of a vast amount of net shorts in the currency. Having that said, the GBP is becoming pricey. The data hasn’t been backing the move at all and a combination of weaker data and stronger currency may ring an alarm at the BoE. Stronger position of PM May could also bring those “Hard Brexit” scenarios back to the table and that was not GBP positive at all back in 2016. For now the currency keeps rallying though so traders should remain vigilant not to bet against a strong trend.

Euro had a solid day as well, although some of the gains have been reduced, especially against the commodity currencies. The currency has received a backing from a brilliant inflation data and this could work for it for a while now. A fading rally on Friday might be just a profit-taking after a monster week for the euro and ahead of the long weekend in Europe.

US received a mixed bag: US GDP was weak and other reports were not too impressive as a sum as well. However, a spending bill has been moved through Senate, reducing some risk of a shutdown.

Outside of G10 we’ve seen MXN rallying nearly 1% as a risk of a NAFTA termination seems to be subsiding.

Equity markets saw a calm Friday with both Europe and US down slightly. We had results from Exxon Mobile and while the EPS was strong we highlight the issue of companies missing high expectations that could eventually lead to a sell-off.

Monday is off for Europe and Japan but we got some key data from the US, including the PCE inflation and the manufacturing ISM so expect market moves to be there.