Today, the British Prime Minister (PM), Theresa May completes her first six months at 10 Downing Street. She was brought into power because of Brexit which has been the defining term of her premiership so far. The British PM is scheduled to deliver her long-awaited Brexit speech next Tuesday. This will be closely analyzed all across the globe to find out how Theresa May sees Britain’s future outside the European Union (EU). Today, the UK economic docket features the Bank of England’s (BoE) credit conditions survey report.

In the Eurozone, data showed that German wholesale prices registered its strongest annual increase since October 2012. Later in the day, the US economic calendar features release of retail sales, producer price index and preliminary reading of the Reuters/Michigan consumer sentiment index.

Pound Sterling – UK Markets

The Pound is trading on a stronger footing against the US Dollar and the shared currency this morning. Today’s British economic calendar features the release of the BoE’s credit conditions survey report, which is due in some time. Sterling faced major ups and downs this week with UK’s PM, Theresa May signalling a possibility for a “Hard Brexit”. On the other hand, the nation received an upbeat set of economic releases and the BoE Governor, Mark Carney clarified that Brexit was no more the biggest risk to British economy and emphasized the need for a transitional deal as UK decides to formally exit the EU.

Market participants will now shift focus to next week’s British PM’s speech for clarity about her plans concerning Brexit negotiation talks once UK formally triggers Article 50. As Theresa May has a self-imposed March 2017 deadline for beginning the formal process, it will be interesting to see whether UK’s Supreme Court rules in favour of the Government or orders Ms. May to get a parliamentary approval for triggering Article 50.

US Dollar – US Markets

The greenback is trading lower against the Euro and the Pound this morning. Ahead in the day, the US retail sales data for December will garner a lot of market attention and is anticipated to register a rise from the prior month. Additionally, the nation’s producer price index for December along with flash reading of the Reuters/Michigan consumer sentiment index for January will be eyed.

The US Dollar ended lower against most of its major peers yesterday, having dropped on President-elect Donald Trump’s first press conference since his victory. In economic news, the number of Americans filing for unemployment benefits rose less than expected last week, from an almost four-decade low level in the preceding week, indicating steady job creation in the nation. Meanwhile, a report released by the US Department of Labour showed that US import price index rebounded in December, mainly due to a rise in oil prices. Separately, the Federal Reserve Chairwoman, Janet Yellen delivered upbeat comments over the short-term US economic outlook. Further, the Philadelphia Fed President, Patrick Harker rooted for three interest rate increases in 2017.

Euro – European Markets

The shared currency is trading higher against the greenback this morning, extending its gains for the third consecutive session, after data showed that German wholesale prices notably rose in December from the previous month, backed by an increase in energy and food prices. Additional support came from Spain, as the National Institute of Statistics showed that Spanish consumer prices advanced in December. Moving ahead, the Euro area’s economic calendar shows that the European Central Bank’s (ECB) interest rate decision will be the highlight next week.

Yesterday, the Euro ended in the green against Sterling and the US Dollar, following release of the Eurozone’s industrial output data which surpassed market expectations for November, as firms stepped up production before Christmas. Meanwhile, publication of the ECB’s December meeting minutes revealed that monetary policymakers were split on whether or not to extend its quantitative easing programme, with tentative signs of inflation picking up in the Eurozone.

Other Currencies – Highlights

The Australian Dollar is trading on a stronger footing against the US Dollar this morning, continuing its rally into the fifth day, despite disappointing trade figures from China, Australia’s largest trading partner. Data showed that China’s trade surplus narrowed in December, as exports registered a sharp contraction and import growth slowed during the same period, thus signalling weakness in the world’s second largest economy. China faces possible tensions in its trade relations with the US, as newly elected US President, Donald Trump prepares to take office. Earlier in the week, the National Bureau of Statistics of China revealed that annual consumer price inflation cooled in December. On the other hand, annual producer price index rose at its fastest pace in the same month.

Back home in Australia, data released earlier this week showed that retail sales increased at a slower pace in November, amid passive consumer spending ahead of the holiday season. Going ahead, traders shift attention to next week with the release of Australia’s labour market and consumer inflation expectations data.