A Light Global Macro Calendar Today
In the absence of any notable domestic macro triggers today, attention among traders is likely to be on tomorrow’s industrial production report and the NIESR GDP estimate in the UK. Going forward, market participants will keep tabs on the BoE’s quarterly inflation report scheduled for release later this week, amid prospects that low global oil prices are likely to keep the nation’s inflation muted.
Across the Atlantic, Friday’s upbeat labour market print lifted the US Dollar against its major peers. The report showed that the number of non-farm payrolls in the US increased at a better than expected pace for January and growth in wage earnings picked up last month. However, the nation’s unemployment rate nudged higher amid signs that more people are looking out for jobs.
Pound Sterling – UK Markets
On Friday, the Pound showed little reaction to the downbeat trade report in the UK which showed a wider than anticipated deficit for December. Britain’s export growth remained weak as a strong Pound-Euro pair along with a slowdown in Europe weighed on overseas demand. Meanwhile, Sterling lost ground against the greenback in the latter half of the trading session and fell below the 1.53 level following the release of the encouraging non-farm payrolls data in the US.
Earlier today, the BoE Governor, Mark Carney, appreciated the stimulus measures announced by the ECB recently, but called for more financial reforms to boost global economic growth. Meanwhile, with no other notable domestic macro events today, market participants will keep a tab on tomorrow’s UK industrial production data for December to gauge the health of the manufacturing sector, particularly after low oil prices weighed on activity across the nation’s energy sector firms. Furthermore, the NIESR’s estimate of GDP for the three months ended January will be eyed later tomorrow to gain an insight into Britain’s economic health during early 2015.
US Dollar – US Markets
The greenback gained ground against its major counterparts on Friday after the robust US labour market report boosted expectations of a mid-2015 interest rate rise in the nation. The report revealed that the number of job additions in the US was better than expected for January, despite last week’s ADP print showing signs of softness in the nation’s private sector hiring pace. Additionally, wage growth picked up in January and eased concerns about disinflation in the US. Meanwhile, market participants overlooked the nation’s unemployment rate which rose unexpectedly for January, amid an increase in job seekers in the US labour market.
With no major economic release today, the US Dollar is trading mostly lower against its key peers this morning. Going forward, investors will keep a tab on tomorrow’s NFIB survey to gain an insight into the morale among small firms in the US, especially considering last week’s strong jobs data. Additionally, this week’s US retail sales and flash Reuters/Michigan consumer confidence reports will be eyed to gauge domestic consumer spending levels during the first quarter of 2015.
Euro – European Markets
On Friday, the Euro lost ground against the greenback following the release of the upbeat US non-farm payroll report. Additionally, concerns about Greece leaving the Euro bloc kept the Euro under pressure, especially after the Greek Prime Minister, Alexis Tsipras, reaffirmed his pledge to end the nation’s austerity. He indicated that his government is unlikely to extend Greece’s international bailout programme and will gradually work towards ending austerity in the country.
Data released earlier today revealed that German trade surplus widened unexpectedly for December, after a weaker Euro boosted exports and cheaper oil prices lowered the import bill in the nation. Additionally, the just out Sentix survey showed that morale among investors in the Euro bloc improved for February, especially after the ECB recently announced its massive stimulus programme. The Euro is trading on a firmer footing against its major peers following the release of today’s data. Going forward, market participants will keep a tab on the preliminary GDP reports across key European nations later this week to gauge the health of the Euro zone economy.
Other Currencies – Highlights
The Japanese Yen lost ground against the greenback in Friday’s trading session following the release of the better than expected US non-farm payrolls data. Over the weekend, data released in Japan showed that the adjusted trade surplus in the nation widened more than anticipated for December. However, the Japanese Yen remained range bound against the greenback following the release of the data.
Earlier today, a report revealed that consumers’ optimism in Japan improved less than expected for January. However, with an improvement in morale among Japanese consumers for a second straight month, investors’ confidence strengthened that the impact of last year’s sales tax hike is fading. Moving ahead, market participants will keep a tab on Japan’s preliminary GDP numbers for the last quarter, scheduled this weekend to gauge the recovery in the economy, especially after it slipped into a recession unexpectedly last year. Additionally, US retail sales and preliminary Reuters/Michigan consumer confidence surveys will be eyed later this week for further direction.