Troublesome growth

Today's news headlines: 

‘UK growth beats expectations but outlook darkens’. The prospect for economic growth in 2021 has darkened even though the economy expanded in the fourth quarter of 2020. The UK’s economy grew 1.0% in the three months to December compared to the previous quarter, which was better than the 0.5% consensus prediction. In 2020, UK output fell 9.9%, the fastest pace of decline in 300 years and more than twice the fall during the global financial crisis. The Bank of England expects a sharp Q1 contraction in growth because of the latest national lockdown, but the vaccine campaign raises hopes of a recovery from the spring. (Financial Times)

‘UK and EU to seek “workable solutions” on N Ireland protocol’. Officials from the UK and EU agreed last night to look for workable solutions for the Northern Ireland border. A joint statement issued after the meeting called the talks ‘frank but constructive’ after a couple of weeks of disagreements between both sides. EU officials are set to hear from Northern Irish businesses to find out how the protocol—which requires all goods flowing from Great Britain to Northern Ireland to follow EU customs regulations—is working in practice. (Financial Times)

Today's events, rates, and data 

  • The Dollar firmed up against its trading peers overnight, taking Sterling below the 1.38 level and the Euro back towards the 1.21 handle. This coincides with a small decline in both US and European equity futures along with Brent crude.
     

Today's events

UK Preliminary GDP: 1.0% vs 16.0% previously
UK Industrial Production: 0.2% vs 0.3% previously
UK Manufacturing Production: 0.3% vs 1.1% previously
US Prelim UoM Consumer Sentiment: 3.00pm
US Prelim UoM Inflation Expectations: 3.00pm

Interbank rates

GBP/USD: 1.3795
GBP/EUR: 1.1385
EUR/USD: 1.2110
USD/CAD: 1.2735