Previous Day's Market Highlights
Risk sensitive currencies led the way on Friday, with the Aussie, Canadian and Kiwi dollars all gaining more than 0.5% as a risk-on mood gripped markets with hopes of a US-China trade deal increasing. High-level discussions between the world’s 2 largest economies in Washington on Friday went well, with President Trump commenting that a deal was “very likely” and outlining a plan to meet his Chinese counterpart next month. Such comments fuelled investors’ appetite for risk, strengthening the antipodean currencies – which are commonly seen as risk proxies. The Canadian dollar also benefitted, with the loonie ending the day as the best performing major, adding over 0.7%, boosted by better-than-forecast retail sales figures and a firming of oil prices.
Elsewhere, the euro remained resilient, trading flat against the dollar, despite German business climate figures falling to their lowest level since December 2014. A certain degree of negative data from the bloc’s largest economy seems to have already been priced in, hence the limited market impact from the data. Sterling was also little changed over the course of the day, with no Brexit news to spark any volatility, though the pound ended the week as the best performing major currency as market participants grew more hopeful of a deal being reached between the UK and EU. Sterling gained against the dollar for the first week in more than a month, adding 1.2% over the past 5 days.
The risk-on mood was also in evidence in other markets. Equities on both sides of the Atlantic recorded gains on Friday with the pan-European stoxx 600 adding 0.3%, the benchmark US S&P500 adding 0.6% and the Dow Jones Industrial Average adding 0.7% to reach its highest level since November and record its 9th straight week of gains. Finally, oil prices traded largely flat on Friday, but gained strongly over the week. With WTI adding 3% and Brent adding 1.2% over the last 5 days to reach their highest levels since November 2018.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
Today’s economic calendar is relatively sparsely populated, with little in the way of top-tier economic data to stimulate markets, with this in mind, investors are likely to take stock ahead of the busy week of economic events that lies ahead. While the pound is likely to remain driven by Brexit-related news, market participants will closely examine BoE Governor Carney’s speech this morning for any comments relating to monetary policy, as well as the UK’s economic outlook after the March 29th exit date. Carney will also be speaking tomorrow, when members of the MPC address the Treasury Select Committee. Meanwhile, the data calendar from the eurozone is devoid of any data while the US session sees only the release of wholesale inventories from December, though this is never normally a market mover.
Looking ahead to the remainder of the week, geopolitical events will remain at the forefront of investors’ minds with Parliament set to have its latest say on Brexit in a vote on Wednesday. While the Prime Minister has confirmed that a ‘meaningful vote’ will be held by 12th March, Parliament is likely to use this week’s vote as another opportunity to avert a ‘no-deal’ exit from the EU – an outcome that would strengthen sterling if successful. Across the pond, President Trump will meet North Korean Leader Kim Jong-Un for a 2-day summit in Vietnam while Fed Chair Powell delivers his semi-annual testimony to congress (Tues and Weds). Market participants will be paying keen attention to the Fed Chair, with particular focus on the rationale behind the Fed’s dramatic U-turn towards a pause in their cycle of raising interest rates at the January meeting.
In terms of economic data, markets will be given plenty to think about. Highlights include GDP for the final quarter of last year from the US and Canada, CPI inflation numbers from Canada, Japan and the eurozone as well as manufacturing PMI figures from most major economies. The latter will likely attract significant attention as the global economy continues to show signs of a slowdown.
Today's Economic Calendar
|10:00||GBP||BoE Gov. Carney Speech|
|15:00||USD||Wholesale Inventories (m/m)||0.2%||0.3%|