UK Economic Data brings the GBP into Focus, with an Eye on the USD

Daily Update - 10th January 2017

Yesterday’s Focus

• EUR Non-monetary policy’s ECB Meeting Reports, Trade balance, Current Account, Imports, Exports
• US JOLTS Job Opening, FOMC Member Kashkari Speech

Yesterday’s Explained

On Tuesday, German Data shows significant Improvement, German Trade Balance and Industrial Production data proved quite strong with significant improvements. The Euro however has lost some value as it traverses above the 1.19 juncture against the U.S Dollar. The Pound has also experienced selling pressure. The U.S. Labor Department released its Job Openings and Labor Turnover Survey (JOLTS). The report showed little change in the number of job openings on the last business day of November. The government report showed the number of openings at 5.9 million.

Traders showed little reaction to dovish comments from Minneapolis Fed President Neel Kashkari. He reiterated his argument that the nation’s big banks need to keep more cash in reserves. The Fed member sees the capital requirement as a way to prevent a future financial crisis akin to the one that occurred in 2008.

Kashkari also said the U.S. Federal Reserve should keep interest rates low so that wage gains accelerate and inflation rises.

Today’s Focus

•              GBP The Industrial Production, Manufacturing production, NIESR GDP Estimate

Today’s Market

It’s a quiet day for the EUR today, with no material stats scheduled for release out of the Eurozone. The recent gains in the U.S Dollar will be warmly received by the ECB and European multinationals, with the upside in the EUR having pegged back European equities for some time.

The markets will be looking ahead to the ECB monetary policy meeting minutes that are scheduled for release tomorrow, though for now it’s all for the Dollar to lose.

While it’s a quiet day for the EUR, it’s a particularly busy day for the Pound. Macroeconomic data out of the UK this morning includes December’s manufacturing and industrial production figures, trade data and the NIESR GDP Estimate. Focus will be on the trade and manufacturing production figures and, while Brexit remains the key driver for the Pound, we will expect the markets to respond to today’s figures.

Across the Pond, stats are limited to December import and export price indexes, which are unlikely to have a material impact on the Dollar, with the markets looking ahead to Friday’s inflation and retail sales figures.