US Jobless Claims and Housing Data in Focus
Nationwide’s report revealed yesterday that house price growth in the UK continued to slow for December, although the print further indicated that activity in Britain’s housing market is anticipated to improve going forward. Market participants will now keenly eye the manufacturing PMI survey in the UK later this week followed by services and construction PMI due next week for further direction to Sterling against the majors.
Across the Atlantic, data released yesterday revealed that consumer confidence improved less than expected for December, as consumers remained uncertain about growth in the labour market going forward. Later today, initial jobless claims and pending home sales data in the US is likely to attract attention among market participants.
Pound Sterling – UK Markets
Sterling is trading in a tight range against the common currency this morning. With no important economic updates in the UK today market participants will eye the jobless claims and pending home sales data in the US today for further direction to the Pound-US Dollar pair. Going forward, Markit report in the UK scheduled this Friday will be eyed to gauge the nation’s manufacturing health for December, especially amid no signs of pickup in demand across key European markets.
The Pound capitalised on the greenback’s losses in yesterday’s trading session following the release of the Nationwide’s housing market print in the UK. While, the report further revealed that activity in the UK housing market is expected to pick up in the forthcoming year, as domestic income levels are likely to pick up going forward, the print revealed that price growth in the nation’s real estate sector for December rose at its slowest annual rate since November 2013, in line with market expectations. It seems that for now, the BoE’s tighter lending norms have been successful in curbing overheating in the sector.
US Dollar – US Markets
The greenback showed little reaction to the Conference Board’s consumer confidence report yesterday and remained under pressure against the majors. The report revealed that morale among consumers in the US improved for December, buoyed by an encouraging assessment of the upbeat economic and labour market conditions in the nation. However, optimism among consumers strengthened less than expected as they were cautious about conditions in the nation’s job market going forward.
Later today, investors will keep a tab on the weekly jobless claims survey in the US for further direction to the greenback against its key peers. The survey is anticipated to show an increase in the number of first time jobless claimants in the nation, but the figure is expected to remain below the 300K mark for a fifth straight week. Additionally, pending home sales data for November will be eyed in the US to gain a better insight into the country’s housing market health, especially after sale of existing and new homes missed market estimates last month.
Euro – European Markets
Yesterday, the Euro lost ground against the Pound. Data released in the Euro zone showed that lending to the region’s private businesses and households for November continued to fall for a twenty ninth straight month. However, the fall in private sector lending was at its slowest pace since April 2013. This assumes significance given the ECB’s stimulus measures introduced earlier this year. Meanwhile, another report revealed that M3 money supply in the Euro zone rose more than expected for November, stoking hopes that the monetary expansion will provide some support to the region’s inflation.
The Euro is trading in a tight range against the majors this morning. The ECB’s Chief Economist, Peter Praet, warned earlier today that lower oil prices are posing an additional downside risk to the Euro bloc’s inflation expectations and policymakers are likely to consider large-scale asset purchases, including sovereign bonds, at the central bank’s next policy meeting. Going forward, later this week investors will eye the revised manufacturing PMI readings across key European nations for December.
Other Currencies – Highlights
The Aussie Dollar briefly gained ground against the greenback earlier today following the release of the private sector credit data in Australia which showed that domestic borrowing climbed at a firmer annual rate for November. The report further revealed that lending across the nation’s business and housing sector remained buoyant this month, with housing loans for investment purpose continuing to grow at a robust pace. Meanwhile, gains in the Aussie Dollar were capped after revised data released in China confirmed that manufacturing activity in the world’s second largest economy contracted for December.
With little on the domestic macroeconomic front, the Aussie Dollar will take direction from the weekly jobless claimants and pending homes sales data in the US later today. Additionally, investors will keep a tab on the ISM’s manufacturing PMI report in the US due this Friday for further direction to the Aussie Dollar-US Dollar pair.