Eurozone, Canadian CPI in Focus

In focus today are final Eurozone and Canadian CPI figures, central bank speeches, and any Brexit headlines.

Previous Day's Market Highlights

The dollar softened yesterday after overnight gains following Wednesday’s Fed minutes. This saw sterling-dollar back above 1.39, although it failed to regain 1.40, and euro-dollar rose back above 1.23. Sterling-euro traded either side of 1.13.
 
The ONS downgraded Q4 growth to 0.4% from its initial estimate of 0.5%, which contributed to morning sterling pressure. In the afternoon, the pound picked up, allowing it to regain 1.78 against the Aussie, 1.91 against the kiwi, and 1.77 against the Canadian dollar. Sterling is trading at its highest levels against the Canadian dollar since last May, with yesterday’s decline in Retail Sales adding to the loonie’s woes.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1337 1.1474 1.1210 2.30%
GBP/USD 1.3939 1.4291 1.3763 3.69%
EUR/USD 1.2295 1.2556 1.2206 2.79%
GBP/AUD 1.7816 1.7861 1.7351 2.86%
GBP/NZD 1.9456 1.9466 1.8942 2.64%
GBP/CAD 1.7719 1.7755 1.7301 2.56%

Today's Market Highlights

Highlights today start with the final estimate of January Eurozone CPI (10:00 GMT). An unrevised figure would likely have little market impact, while any revisions could see at least an initial move in the euro. Subdued inflation has been a point of concern for the ECB when considering its next monetary policy move.
 
MPC Member Ramsden delivers a speech on productivity at noon, which could pose some event risk for the pound. Also key for the pound will be any Brexit headlines after May’s Cabinet meeting yesterday. Other central bank speakers include the Fed’s RosengrenDudley, and Mester (15:15, 18:30 GMT) and the ECB’s Cœuré (18:30 GMT).
 
In the afternoon, Canadian CPI (13:30 GMT) will drive the loonie’s direction. A slower year-on-year figure could put further pressure on the loonie, while a surprise to the upside could help it ease back from nine-month lows against the pound.

Today's Economic Calendar

Time Currency Release Consensus Previous
10:00 EUR Final Eurozone CPI YoY (Jan) 1.3% 1.3%
10:00 EUR Final Eurozone Core CPI YoY (Jan) 1.0% 1.0%
12:00 GBP BoE's Ramsden Speaks 2.4% 1.7%
13:30 CAD CPI YoY (Jan) 1.4% 1.9%
13:30 CAD CPI MoM (Jan) 0.7% -0.4%
13:30 CAD Core CPI MoM (Jan) 0.1%
USD Fed Monetary Policy Report
15:15 USD Fed's Rosengren & Dudley Speak
18:30 USD Fed's Mester Speaks
18:30 EUR ECB's Coeure Speaks
20:40 USD Fed's Williams Speaks

Caxton