EU Summit, US Data in Focus

Politics and US data are in focus today. Yesterday's calendar was busy but movement more subdued.

Previous Day's Market Highlights

Despite a busy calendar day yesterday, market movement was relatively limited given the lack of central bank surprises. The ECB and BoE both kept policy on hold as was widely expected. The BoE kept expectations for a gradual pace of rate hikes, with the next hike not expected until late 2018. The ECB revised its 2018 inflation projections higher to 1.4%.
Earlier in the session, the pound received a small boost as Retail Sales jumped in November. The dollar later gained, particularly against the euro, as US Retail Sales also came in above forecast.
Sterling saw some gains around the 4pm fixing. This saw GBP/EUR drift towards 1.14 and GBP/USD pick back up towards 1.3440, where it held overnight. EUR/USD held below 1.18.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1394 1.1509 1.1133 3.27%
GBP / USD 1.3436 1.3550 1.3169 2.81%
EUR / USD 1.1792 1.1961 1.1713 2.07%
GBP/AUD 1.7474 1.7999 1.7363 3.53%
GBP / NZD 1.9127 1.9836 1.9080 3.81%
GBP / CAD 1.7127 1.7468 1.6800 3.82%

Today's Market Highlights

The calendar is quieter today as the week draws to a close. MPC Member Haldanespeaks at the International Rome Conference on Money, Banking, and Finance (13:15 GMT). Traders will keep an eye on any additional monetary policy guidance following yesterday’s policy meeting.
Headlines from the EU Summit will be key, particularly regarding the proposed deadline for agreeing a transition deal.
In the afternoon, attention will be on US Industrial Production and Capacity Utilization data (14:15 GMT). Mixed figures are expected, which may provide little clear direction for the dollar this afternoon. The future of the tax bill is also in focus with renewed doubts about its ability to pass after senator Rubio said he would not vote for it without changes to the child tax credit.


Today's Economic Calendar

Time Currency Release Consensus Previous
10:00 EUR Trade Balance s.a. (Oct) €24.4B €25.0
12:00 GBP BoE Quarterly Bulletin
13:15 GBP MPC Member Haldane Speaks
13:30 CAD Manufacturing Shipments MoM (Oct) 0.8% 0.5%
13:30 USD NY Empire State Manufacturing Index (Dec) 18.6 19.4
14:15 USD Industrial Production MoM (Nov) 0.3% 0.9%
14:15 USD Capacity Utilization (Nov) 77.2% 77.0%