The Greenback strengthened as the sharp US stocks sell-off continues
- GBP - Services PMI
- USD - ISM Non-Manufacturing PMI
- EUR - ECB President Draghi Speaks
The US stock market has seen a sharp sell-off as the investors begin to worry the increasing inflation and wage pressures will increase the interest rates. The selloff began with the rising of bond yields and has led to the largest fall in stocks in two years. This comes as Jerome Powell takes over as chair of the Federal Reserve. Powell now faces a tough discussion between keeping the stock market happy and increasing rates in March as originally planned. This large selloff has seen the Dollar boosted against its major counter parties.
The Pound weakened yesterday, as the Services PMI, which makes up 80% of the GDP, fell to 53 for January. Dropping from 54.2 the previous month, the bearish figure fell to a 16-month low as respondents mentioned a drop in new orders as the reason. However, respondents did show signs they expected activity to increase over the next year.
- CAD - Trade Balance
- NZD - Employment Change q/q
- NZD - Unemployment Rate
The European Central Bank have announced they will be preparing for the possibility of a no transition period after Brexit. ECB President, Mario Draghi spoke to the European Parliament last night, warning that there could be substantial risks if the transition deal is not well managed. The statement comes as the next round of Brexit negotiations begin. This round will focus on some of the unresolved issues from the first stage of the talks, as well as beginning to negotiate the transition phrase.