Equities Turn Higher; Fed Speakers, RBNZ in Focus

After another volatile day, equities have turned higher. Fed speakers and the RBNZ policy decision are in focus.

Previous Day's Market Highlights

The dollar initially gained but reversed course as risk appetite improved. This saw a pick-up in sterling-dollar back above 1.39 that moved the pound higher across the board, reversing morning losses to be relatively unchanged on the day. Euro-dollar reversed a dip towards 1.2320. Sterling-euro held below 1.13.
Equities had another volatile day yesterday following trading Monday that saw the DJIA have its largest single-day point drop. The Vix, which measures expected volatility based on S&P 500 options, temporarily hit its highest levels since 2015. US stocks ultimately ended the day up, but the FTSE 100 had its biggest drop since the EU referendum.
The kiwi dollar strengthened overnight after employment data surprised to the upside. This saw the sterling-kiwi temporarily below the 1.90 level, but it regained 1.91 in overnight trading. The Unemployment Rate fell to 4.5%, while Employment Change and the Participation Rate slowed less than expected in Q4.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1270 1.1512 1.1197 2.72%
GBP/USD 1.3955 1.4346 1.3458 6.19%
EUR/USD 1.2383 1.2538 1.1923 4.91%
GBP/AUD 1.7725 1.7861 1.7098 4.27%
GBP/NZD 1.9081 1.9466 1.8613 4.38%
GBP/CAD 1.7464 1.7646 1.6778 4.92%

Today's Market Highlights

European equity markets have opened higher this morning. Equities and politics will remain in focus as the economic calendar is once again fairly light. There are several Fed speakers, but the dollar impact may be limited as Dudley (13:30 GMT) is to speak on banking culture, Evans (15:15 GMT) is to speak at the Iowa Bankers Association Bank Management Conference, and Williams (22:20 GMT) will speak after the European close.
The main economic event today is the Reserve Bank of New Zealand’s latest monetary policy decision (22:00 GMT). The RBNZ is expected to join the RBA this week in keep interest rates on hold.
The next major event for the pound is tomorrow’s Bank of England meeting. The BoE is expected to keep rates unchanged but as it is a “Super Thursday”, sterling movement will largely be driven by any revisions to the Bank’s inflation and economic growth projections and the corresponding implications for higher interest rates.

Today's Economic Calendar

Time Currency Release Consensus Previous
13:30 USD Fed's Dudley Speaks
15:30 USD Fed's Evans Speaks
20:00 USD Consumer Credit Change (Dec) $20.00B $27.95B
20:00 NZD RBNZ Interest Rate Decision 1.75% 1.75%
20:00 NZD RBNZ Monetary Policy Statement
21:00 NZD RBNZ Acting Governor Spencer Speaks
21:00 NZD RBNZ Press Conference