Daily Update - 11th October 2017
Germany reported a larger than anticipated trade surplus driven by a 3.1% increase in exports. Economists only anticipated a 1.1% rise in demand but imports and exports rose sharply, which is a sign of strength for the economy. There were a number of factors affecting sterling today but U.S. dollar weakness and manufacturing activity were the main drivers. Although the trade deficit increased, industrial and manufacturing production grew at a faster pace on an annualized basis in the month of August. After a long and significant sell-off, investors were relieved to see some improvements in data that helped to support the Bank of England's case for tightening. These improvements allowed them to overlook World Bank's grim outlook for the U.K. economy. They released their upgraded global growth forecasts today and growth was upgraded for many economies expect for the U.K. and U.S. They cited political and fiscal uncertainties as U.S. risks and Brexit as the main worry for the U.K. Sterling appears very strong and poised for a move to 1.3270, possibly even 1.33. The highlight of the day will be the Federal Reserve as they release the minutes from its September meeting. This will provide some further details to the Fed’s recent thinking, but shouldn’t lead to any major revelations. After the policy statement, the economic projections, and Yellen’s press conference last month, as well as recent Fedspeak and data, the markets have all they need to in order to fine tune the outlook including pricing in a December rate hike. In that decision, they insisted that another rate hike is coming in December and provided support to the dollar. Yesterday’s Focus
Yesterday’s Explained
Today’s Focus
Today’s Market
