Brexit Updates, US Data in Focus

Brexit negotiation updates and US personal expenditure data are in focus today

Previous Day's Market Highlights

Faster-than-expected Q4 economic growth saw the pound strengthen again during the morning session. Sterling-dollar rallied above 1.42 but failed to regain 1.43. Sterling-euro held below previous highs above 1.15 but largely traded above 1.14. Euro-dollarmade another attempt at 1.25 before pulling back.
 
The dollar, which had come under pressure last week in part as Treasury Secretary Mnuchin seemed to support a weaker greenback, recovered some ground in the afternoon session and heading into Monday ahead of a busier week. 

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1390 1.1501 1.1197 2.72%
GBP/USD 1.4130 1.4344 1.3331 7.06%
EUR/USD 1.2402 1.2535 1.1817 5.73%
GBP/AUD 1.7470 1.7718 1.7098 3.50%
GBP/NZD 1.9281 1.9462 1.8613 4.36%
GBP/CAD 1.7439 1.7638 1.6757 4.99%

Today's Market Highlights

Brexit headlines will be in focus today with the EU General Affairs Council to hold a press conference after its meeting this afternoon. Attention will be on the negotiating directives, particularly for a transition period. As usual, Brexit sentiment remains a key driver for the pound.
 
Also on the agenda are speeches from several ECB Governing Council members. Praet will speak at the Council of the EU (10:00 GMT), Lautenschläger at a conference on Basel III (10:45 GMT), and Cœuré at the Commission Économie et financements du MEDEF in Paris (16:00 GMT).
 
The US is the main source of today’s economic indicators, including the latest Personal Spending, Income, and Personal Consumption Expenditure figures (13:30 GMT). Overnight, Kiwi dollar traders will watch December trade data, whilst Aussie traders will keep an eye on NAB Business Confidence figures ahead of Wednesday’s Q4 CPI release.
 
Looking ahead, this week is set to be a busy one. BoE Governor Carney is to testify before the House of Lords’ Economic Affairs Committee on Tuesday. On Wednesday, the Fed announces its first interest rate decision of the year. The key data releases include the preliminary estimate of Q4 GDP and January inflation from the Eurozone and the US’s January jobs report.  

Today's Economic Calendar

Time Currency Release Consensus Previous
10:00 EUR ECB's Praet Speaks
10:45 EUR ECB's Lautenschlager Speaks
13:30 USD Personal Spending (Dec) 0.4% 0.6%
13:30 USD Personal Income MoM (Dec) 0.3% 0.3%
13:30 USD Personal Consumption Expenditures - Price Index YoY (Dec) 1.9% 1.8%
16:00 EUR ECB's Coeure Speaks
21:45 NZD Trade Balance MoM (Dec) $-125M $-1,193M
00:30 AUD National Australia Bank's Business Confidence (Dec) 12 6

Caxton