A Light Global Macro Calendar Today
In the absence of major macro updates in the UK today, the Pound has gained ground against its key counterparts this morning. Sterling investors are likely to remain focused on the BoE’s quarterly inflation report scheduled for release tomorrow to gauge the central bank’s stance in the midst of a subdued price environment.
Across the Atlantic, after the NFIB survey revealed yesterday that morale among small firms deteriorated for January, investors will eye tomorrow’s US retail sales data to gain an insight into last month’s local consumer spending levels. In the Euro zone, the Finance Ministers’ meeting in Brussels today will attract considerable attention among market participants, as the debt stand-off with Greece's new anti-austerity government remains a contentious issue among policymakers.
Pound Sterling – UK Markets
The Pound gained ground against the majors yesterday following the release of an upbeat growth estimate for the UK by the NIESR for the three months ending January. Amid recent comments from various BoE officials suggesting that low oil prices are likely to have a positive impact on the UK economy, thus economic recovery is expected to remain supported in the near term. Meanwhile, the manufacturing production print in the nation showed that domestic manufacturers’ output rose unexpectedly for December, climbing for a second consecutive month. However, industrial production in the UK declined more than expected for December as the fall in global oil prices along with the maintenance work in the North Sea oil and gas rigs weighed on domestic output.
Amid no crucial macro updates in the UK today, investors are likely to remain focused on the Euro zone’s Finance Ministers meeting today for further direction, especially considering the stand-off between Greece and its international creditors. Going forward, the BoE’s quarterly inflation print tomorrow is likely to attract attention among traders.
US Dollar – US Markets
The US Dollar lost ground against the Pound yesterday after NIESR predicted a stronger economic growth in the UK for the three months ended January. Additionally, the NFIB report showed that morale among small businesses in the US retreated unexpectedly for January, as these firms remained cautious of their near term outlook and expressed reluctance about initiating new business investments. On the other hand, December’s JOLTS report revealed openings in the job market soared from previous reading, confirming a marked improvement in the labour market as evidenced by the upbeat payrolls data in recent times. Investors will continue to eye job reports going forward to ascertain if growth in wage earnings accompany the robust hiring pace in the US.
The greenback is trading mixed against the majors this morning ahead of the mortgage applications report scheduled for release today. Going forward, investors will eye tomorrow’s US retail sales data to gauge the level of consumer spending for January.
Euro – European Markets
With no key economic releases in the Euro zone today, the single currency is trading in a tight range against the US Dollar this morning ahead of the bloc’s finance ministers’ meeting scheduled later today. This meeting will attract significant attention among market participants where the spotlight is expected to be on Greece’s mounting debt problems, particularly considering that the existing support measures in the nation are set to expire at the end of this month. Moving ahead, traders will keep a tab on the preliminary GDP data across key European nations scheduled later this week to gauge the region’s macro health during the last quarter of 2014. Any downside surprise in Euro zone’s GDP readings is likely to raise concerns among investors, especially considering that the region’s deflationary headwinds have continued to weigh on domestic activity of late.
Yesterday, the Euro remained range bound against the greenback. Data released yesterday revealed that industrial production in France and Italy rose more than expected for December, boosting hopes that economic troubles across key European nations have bottomed out.
Other Currencies – Highlights
Yesterday, the New Zealand Dollar lost ground against the greenback. Data released overnight revealed that card expenditures in New Zealand picked up last month, as high spending among consumers on consumables and durable goods offset the impact of low fuel prices. Separately, a report released earlier today showed that house prices in New Zealand dropped for January, especially after home sales in volume terms declined last month. However, the Kiwi Dollar has shown little reaction to today’s data and gained ground against the US Dollar. Later today, market participants will eye the Business NZ PMI report for further direction. Additionally, a speech by the RBA Assistant Governor, Guy Debelle, is likely to attract considerable attention among investors, especially after the central bank Chief recently hinted at prospects of a rate cut in New Zealand.
With no other crucial domestic macro updates today, investors in the Kiwi Dollar-US Dollar pair will keep a tab on tomorrow’s retail sales report and Friday’s preliminary Reuters/Michigan consumer confidence survey in the US for further direction.