Good morning
A strong retail sales number from US yesterday did give USD a bit of a boost, helping push GBPUSD down just below 1.2000 and EURUSD to 1.0660 although it was unable to hold those gains are those pairs are now trading 1.2060 and 1.0715 respectively. GBPEUR down at 1.1255, GBP still struggling to recover against EUR after yesterdays weaker than expected UK inflation number.
Lagarde continued with the theme that ECB are committed to bring down inflation and rates will have to go higher, starting with a 50bps rise in March. What follows that in the May and June meetings is less clear but will almost certainly be a 25 or 50bps rise.
AUD weakened on less than inspiring employment data overnight with GBPAUD trading from 1.7425 to 1.7500 and AUDUSD from 0.6910 to 0.6870 but has since not reversed those losses but made further gains, now 1.7400 and 0.6930 respectively. I’ve not found a sensible reason to explain the change in fortunes for AUD although some are saying the weak employment numbers could be due to seasonal factors.
Staying down under, there is some suggestion RBNZ may pause rate rises at their meeting next week after a state of emergency was declared in response to the recent weather in NZ.
No major UK or EU numbers out today although we do have several ECB officials speaking today including Lane, who historically is more likely to move markets, however I think policy is pretty clear at the moment so doubt there is much anyone can add that will be a major surprise. Same with the BoE and Fed officials speaking today as well.
Tomorrow morning we have UK retail sales numbers, while a strong number should be a good sign, I’ve still not fully figured out whether a higher reading could simply be down to higher prices and not perhaps indicative of strong demand. I should do some research but if anyone knows the answer and can save me some time do feel free to enlighten me.
Scotland’s First Minister Sturgeon has resigned in a move which took many by surprise. Whether it was the failure to getting the backing needed for another independence referendum, whether it was some rather unclear decisions over the rights of men, women and men wanting to be women, or whether she’d just had enough I really am not sure. I would say though that while she was never my cup of tea and I rarely agreed with her views, I did admire her for her clear speech and decisive plans. Can’t say I’ll miss her but politics needs people like her I think.
- 09.00 ECB economic bulletin
- 09.15 ECBs Panetta speaks
- 13.30 US philly fed survey, housing starts, initial jobless claims
- 15.00 ECBs Lane speaks
- 17.00 BoEs Pill speaks
- 19.45 ECBs de Guindos speaks
- 21.00 Feds Cook speaks
- 21.30 NZ business PMI
- 22.30 RBAs Lowe speaks
- 22.55 BoCs Beaudry speaks
- 07.00 UK retail sales
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