Previous Day's Market Highlights
The pound fell by around 0.5% on Thursday as the Prime Minister suffered a parliamentary defeat on her Brexit plan ‘B’. Though the motion put to a vote was neutral, and the vote itself symbolic, the result undermines the fragility of the PM’s negotiating position. Furthermore, the result provides further evidence of how difficult it will be to win over Parliament to vote in favour of her deal with the EU - especially after both Europhile and Eurosceptic MPs from the Conservative party abstained yesterday. With just 42 days left until the UK is due to leave the bloc, yesterday’s result throws the March 29 exit date into doubt.
Away from the parliamentary vote, US retail sales experienced their biggest fall since 2009 in December, decreasing by 1.2% on a month-on-month basis, with core retail sales also declining by 1.8%. Despite the poor data, with initial jobless claims and producer price inflation also missing forecasts, the dollar gained around 0.1% against a basket of peers, with the greenback seeing some demand as other safe-havens strengthened – largely due to news from China that a trade deal could be a significant way off.
Elsewhere, eurozone GDP data for the final quarter of last year was broadly in line with forecasts showing growth of 0.2% on a quarter-on-quarter basis. The euro traded largely unchanged after the release, however the data will do little to reassure investors with growth remaining at its lowest levels in around 4 years. In contrast to the single currency, the Kiwi dollar continued to extend its gains after the RBNZ meeting earlier this week, with the antipodean currency gaining a further 0.5% against its US counterpart. The Canadian dollar was the major loser of the day, falling in line with the drop in oil prices.
Away from FX, European equity markets lost ground, with the pan-European Stoxx 600 losing 0.2%. In the US, markets closed modestly lower in reaction to the weak retail sales figures, with the benchmark S&P 500 losing 0.25%. Finally, oil prices snapped their winning streak with Brent losing half of one percent as concerns of a global economic slowdown intensified.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
The main economic data today comes from the UK, with January’s retail sales figures set to be released this morning. Expectations are for both the headline and core figures to bounce back from a poor showing in December, with an increase of 0.2% on a month-on-month basis expected for both measures. Though the Brexit impasse and further negotiations remain the main determinants of the pound’s longer-term direction, some volatility could be experienced in the immediate aftermath of the release, especially if vastly different from forecasts.
The economic calendars in the eurozone and the US are also busy to close out the week. Firstly, trade balance data for the eurozone will be released with the trade surplus expected to have increased to 15.6bln EUR which would be the highest level since August 2018. Across the pond, focus will lie with the latest set of consumer sentiment figures from the University of Michigan, expected to bounce back to 93 after last month’s plunge to the lowest level since President Trump came to office. A couple of central bank speakers are also scheduled, with investors due to hear from both the ECB’s Coeuré and the Fed’s Bostic this afternoon.
Looking ahead to next week, highlights include labour market reports from the UK and Australia as well as CPI inflation estimates and February’s flash PMI figures from the eurozone. Finally, minutes from January’s Federal Reserve meeting will also be released which will give market participants an insight into the opinions of FOMC members and the reasons behind their decision to pivot away from their hawkish stance and pause their cycle of tightening policy.
Today's Economic Calendar
|9:30am||GBP||Retail Sales (m/m)||0.2%||-0.9%|
|9:30am||GBP||Core Retail Sales (m/m)||0.2%||-1.3%|
|3:00pm||USD||Prelim. UoM Consumer Sentiment||93.0||91.2|