The global economic calendar was off to a slow start today, with only a couple of economic releases having crossed the wires so far. Data showed that UK’s British retail sales picked up speed in December, boosted by a last-minute dash for Christmas gifts and festive foods. In the Eurozone, French industrial output strongly rebounded in November after witnessing two months of contraction.
Later today, the economic calendar will gather pace amid data releases from across the Atlantic. The US JOLTS job openings and wholesale inventories along with the IBD/TIPP economic optimism and NFIB business optimism index are up for release.
Pound Sterling – UK Markets
The Pound is trading on a weaker footing against the greenback and the shared currency this morning, as it continues to remain under pressure following recent comments from British Prime Minister, Theresa May, suggesting an aggressive exit from the European Union. A report released overnight by the British Retail Consortium indicated that retail sales advanced on an annual basis in December, amid robust sales recorded in the Christmas week, thus ending 2016 on a positive note. The report indicated that food sales was the major contributor to growth, since non-food sales were sluggish.
Today, UK’s economic calendar is devoid of any other key economic releases. Investors will now shift attention to tomorrow’s crucial economic indicators which include manufacturing and industrial production data along with the NIESR GDP estimate. These data points will provide a clearer picture about whether the British economy still stands resilient in the aftermath of the historic Brexit vote.
US Dollar – US Markets
The greenback is trading lower against the shared currency this morning, extending its previous session losses. Ahead in the day, market participants will keep a close watch on the US JOLTS job openings data for November along with the NFIB business optimism index for December. Both the data points are anticipated to show modest improvements compared to their previous records. Further ahead in the week, the nation’s retail sales and initial jobless claims data will be in the limelight.
Yesterday, the greenback ended lower against the Euro and higher against the Pound. On the data front, the US labour market conditions index dropped in December. Meanwhile, consumer credit registered a higher than expected rise for November. Elsewhere, two regional Fed speakers expressed different viewpoints on the number of interest rate increases needed in 2017. However, they both agreed that the US inflation and labour market conditions are steadily improving.
Euro – European Markets
Yesterday, the shared currency ended higher against its major counterparts, after the Eurozone’s Sentix investor confidence index blew past investor expectations for January. The index advanced to its highest level since mid-2015, amid increased optimism over the region’s economic outlook. Additionally, Eurostat indicated that the common currency region’s unemployment rate remained unchanged at a 7-year low of 9.8% in November. In other economic news, unemployment in Italy rose to its highest level since June 2015 in November.
This morning, the Euro surged above the crucial 0.8700 handle against the Pound, as Sterling remains under pressure amid heightened fears of a ‘Hard Brexit’. On the data front, statistics agency INSEE reported that the volume of production in French industries rebounded sharply in November, suggesting that the nation’s economy might have accelerated in the final quarter of the year. Looking ahead, market participants await the European Central Bank’s monetary policy minutes and the Eurozone’s industrial production data, due later this week.
Other Currencies – Highlights
The Swiss Franc is trading on a stronger footing against the US Dollar this morning. A report by the State Secretariat for Economic Affairs showed that Switzerland’s seasonally adjusted unemployment rate remained steady at 3.3% in December. As there are no other economic data points scheduled in Switzerland during the remainder of this week, investors’ will keep track of the US releases such as retail sales and consumer sentiment index for trading in the US Dollar - Swiss Franc currency pair.
Data released during the previous session indicated that Switzerland’s annual real retail sales rose more than market expectations in November. It marked the first increase in almost one and a half years, reversing a decline recorded in October. Additionally, the Swiss National Bank, in its preliminary full year results, posted robust profits for 2016, on the back of stable domestic currency and rising value of stocks, bonds and other assets. The central bank recovered from steep losses recorded in the previous financial year.