Eurozone has all the economic news today
The Eurozone economy takes centre stage at the start of this trading week. The just out data showed that the region’s Sentix investor confidence advanced above expectations in October. Separately, German trade surplus widened in August. Meanwhile in Britain, the sole economic data point is the British Retail Consortium’s (BRC) retail sales data.
The US economic calendar is devoid of data releases today, but will command maximum attention as the week goes on, with the Federal Reserve’s (Fed) September monetary policy meeting minutes and retail sales data due out, plus a handful of Fed speakers, most importantly, the Fed Chairwoman Janet Yellen, will be making speeches.
Pound Sterling – UK Markets
The Pound is trading lower against its major peers this morning. The sole economic release in Britain today is the BRC retail sales monitor for September, and the rest of the week will also be pretty light on the data front. We will see RICS house price balance and construction output data, the Bank of England’s third quarter credit conditions survey report is also due this week.
Last Friday, Sterling ended the day on a subdued note against the US Dollar and the Euro, after witnessing a sharp drop during the Asian trading hours. The precipitous drop was attributed to algorithms picking up on comments from the French President, Francois Hollande, who took a tough stand on Brexit. Another theory that emerged was that of a so-called fat-finger trade i.e. where a trade is erroneously entered. On the data front, the latest report from NIESR estimated UK’s GDP growth at 0.4% in the 3 months to September.
US Dollar – US Markets
The US Dollar ended mixed against its key peers on Friday. Data showed that nonfarm payrolls in the US advanced less than expected in September, but the nation’s job growth seemed good enough for the Fed to increase its key interest rate before the end of this year. The unemployment rate surprisingly rose in the same month, while average hourly earnings advanced slower than expected. Meanwhile, the nation’s consumer credit grew more than expected in August at the fastest pace in a year, as demand from car loans and credit cards picked up.
The greenback is trading stronger against the Pound and Euro this morning. Market participants can’t wait to see the US advance retail sales figures along with FOMC minutes, and are keen to see what Janet Yellen has to say later in the week which might shed light on the timing of the next interest rate rise by the US Fed.
Euro – European Markets
The shared currency is trading mixed against the greenback and the Pound this morning. The just released data showed that the Eurozone’s Sentix investor confidence blew past market expectations in October. In other economic news, German trade surplus widened above expectations in August, buoyed by a robust rebound in exports. In fact, the nation’s exports recorded its biggest increase since May 2010. Imports also registered a more than expected rise for August. The German current account surplus, a broad measure of the economy’s international financial position, slightly narrowed in August, but came above market expectations. Elsewhere in Italy, seasonally adjusted industrial output surprisingly advanced in August.
On Friday, the Euro ended higher against its major peers, after positive data release from the Eurozone’s power-house economy. A report by the German Federal Statistical Office showed that German factory production bounced back at a higher rate than expected in August and registered its steepest increase since January this year.
Other Currencies – Highlights
The Swiss Franc is trading on a weaker footing against the greenback this morning, as the domestic currency seems unimpressed by Switzerland’s latest unemployment rate data. A report by the State Secretariat for Economic Affairs showed that Switzerland’s seasonally adjusted unemployment rate unexpectedly remained steady at 3.3% in September. Looking ahead, market participants will witness the release of Swiss ZEW expectations survey and producer and import prices data this week.
Over the weekend, the Swiss National Bank (SNB) Chairman, Thomas Jordan, while speaking at the International Monetary Fund meetings in Washington, stated that the Swiss Franc still remains “significantly overvalued”. However, he indicated that although the potential to lower interest rate further into negative territory does exist, the SNB is convinced at present with its twin-pillar strategy of negative interest rate and a pledge to intervene in currency markets. In other economic news, Swiss foreign currency reserves marginally increased in September.