The US economic calendar appears to be filled with a deluge of economic releases today. The US economic docket features the release of the revised estimate of annualised gross domestic product for the third quarter and durable goods orders data scheduled in a few hours. Additionally, US initial jobless claims, personal income and spending, along with CB leading indicator will grab investors’ attention. Separately, data released earlier in the session showed that confidence amongst UK consumers rose in December. Additionally, Germany’s annual import prices advanced for the first time in four years in November.
Yesterday, data out from the Eurozone showed that the region’s consumer confidence advanced in December, hitting its highest level in 20 months.
Pound Sterling – UK Markets
The Pound is trading lower against the US Dollar and the shared currency this morning. Earlier in the session, the latest survey from GfK showed a slight improvement in confidence amongst British consumers in December, amid optimistic attitude towards making major purchases such as furniture or white goods. However, the long running survey also indicated a drop in outlook for the general economic situation over the coming year, due to looming Brexit negotiations and rising consumer prices in the UK. Separately, a business lobby group, the Confederation for British Industry (CBI) reported that private sector growth accelerated in the last three months, as businesses showed robust growth in the aftermath of the Brexit vote. The group stated that although economic growth remained resilient until now, it expected a slowdown going in 2017, amid rising uncertainty over UK’s relationship with the European Union (EU) after the nation formally takes an exit.
Sterling weakened against the greenback and the Euro yesterday, after data indicated that UK’s public sector net borrowings rose more than expected as the nation’s debt reached a new record high in November.
US Dollar – US Markets
Yesterday, the greenback weakened against its major peers, reversing its previous session gains. On the data front, weekly MBA mortgage applications in the US bounced back into positive territory from its lowest level since January this year. Meanwhile, existing home sales in the nation registered an unexpected rise on a monthly basis in November, notching its highest level in nearly 10 years, as buyers rushed into the market to take advantage of low interest rates in anticipation of further rise in borrowing costs.
The US Dollar is trading higher against the Pound and lower against the shared currency this morning. Market participants will keep a close eye on the third estimate of the US GDP, durable goods orders and weekly jobless claims along with personal spending and income data, scheduled to be released later in the day. The US annualised GDP is expected to deviate upwards from its previous reading in the third quarter of 2016, due to the improvement of the labour market and a rise in wages. Traders will focus on new home sales data and the Reuters/Michigan consumer sentiment index, due to release tomorrow.
Euro – European Markets
The Euro is trading in positive territory against its major counterparts this morning after the European Central Bank (ECB), in its latest economic bulletin, published that it anticipates headline inflation in the Eurozone to grow significantly on the back of recent surge witnessed in oil prices. Furthermore, the central bank expects economic expansion in the region to proceed at a moderate but firming pace. Separately, economic data showed that the German import price index rebounded on an annual basis in November, the first rise in last four years. Currency traders will keep a tab on Germany’s Gfk consumer confidence index for January 2017, scheduled to release tomorrow.
Yesterday, the shared currency ended on a stronger footing against the greenback and the Pound, after the European Commission indicated that the Eurozone’s consumer confidence index strengthened to a 20-month high level in November. The growth adds to the steady improvements across the region which includes notably healthier labour market conditions and increased expectations that the bloc's economy would gather momentum into next year.
Other Currencies – Highlights
During the previous session, the Swiss Franc ended higher against the greenback, after the Swiss National Bank (SNB), in its quarterly bulletin report, stated that the nation’s economy is expected to recover further in the coming quarters, as robust economic data are pointing towards an optimistic picture of the economic growth in the near term. Additionally, the SNB revealed that inflation expectations will play a pivotal role in the medium term and a rise will likely push the inflation rate slightly higher. Moreover, the central bank reiterated that it will cling to its monetary course outlined at its monetary policy assessment in mid-September. Data released earlier this week indicated that trade surplus in Switzerland expanded more than anticipated in November, as imports fell faster than exports.
The Swiss Franc has extended its previous session gains and is trading higher against the US Dollar this morning. Market participants look forward to Swiss KOF leading indicator data for December, scheduled to be released tomorrow.