Change in strategy

Today's news headlines: 

‘British retail sales drop sharply in December as Omicron spreads’. UK Retail Sales fell 3.7% in December, much worse than the -0.6% forecast by analysts. Strong pre-Christmas activity fell away with the implementation of ‘Plan B’ restrictions and rising Omicron infections. Despite such a sharp decline, Retail Sales remain above pre-pandemic levels. Consumer Confidence has taken a hit, falling to its lowest level for a year, as the cost of living looks set to rise. (Financial Times)

‘Investors turn to Europe in search of stock market bargains’. European equities have been in favour at the start of 2022, with MSCI’s European value stock index outperforming its World index by 5.0% so far this year. Rising Treasury yields and the prospect of interest rate hikes in the US have pushed longer duration assets out of favour, with the tech-heavy Nasdaq down 10.0% year to date. With the European Central Bank only expected to raise rates once this year, some asset managers have placed an ’overweight’ recommendation on European stocks. (Financial Times)


Today

Asian indices tracked lower overnight after yet another negative close on Wall Street, with the S&P 500 falling 1.10%. Treasury yields backed off; the US 10-year is trading around 1.78% this morning. Cable has fallen back below $1.36 in early trade after a negative Retail Sales and Consumer Confidence print.

Events

UK Gfk Consumer Confidence: -19 (est. -15)
UK Retail Sales m/m (Dec): -3.7% (est. -0.6%)
European Central Bank President Christine Lagarde speaks: 12:30PM
Monetary Policy Committee member Catherine Mann speaks: 1:00PM
Canada Retail and Core Retail Sales m/m (Nov): 1:30PM
Eurozone Consumer Confidence: 3:00PM
US Treasury Secretary Janet Yellen speaks: 4:30PM


Interbank rates:

GBP/USD – 1.3559
GBP/EUR – 1.1966
EUR/USD – 1.1331
USD/CAD – 1.2530

The markets are moving. To speak to our team, please call +44 (0)20 3465 8200.