Le Pen gains momentum

Yesterday’s markets

20th January 2017

  • EUR - Minimum Bid Rate: 0.00%
  • CAD - Manufacturing Sales m/m: 1.5%
  • EUR - ECB Press Conference
  • USD - Building Permits: 1.21M
  • USD - Philly Fed Manufacturing Index: 23.6
  • USD - Unemployment Claims: 234K

It was another busy day for FX markets as the European Central Bank announced their latest rate decision and the US released a raft of high tier data. Firstly, the ECB unsurprisingly kept rates on hold at record lows of 0.00%, keeping its stimulus programme constant as well. However, the focus was on ECB President Mario Draghi and the press conference which followed. Draghi confronted inflation in the region, saying that the ECB will look past the recent acceleration, as long as underlying price pressures remain subdued. Consumer prices are currently causing fear in the Eurozone’s largest economy; Germany.

In other news, the populist leader of the National Front, Marine Le Pen is gaining support in France. According to the latest French election poll Le Pen had 25%-26% support compared with 23%-25% for Republican candidate Francois Fillon. As Le Pen gains support, the chances of France also leaving the EU heighten. However, European Commission, Pierre Moscovici said on Thursday that there is still little chance of Le Pen securing the broad support needed for the victory.

Across the pond, the US released better than expected data yesterday afternoon. The Philly Fed Manufacturing Index, Unemployment Claims and Housing Starts all exceeded economists’ consensus. The Philly Fed registered its best reading since November 2014, a posting of 23.6. Furthermore, the US labour market continues to go from strength to strength as Jobless Claims fell to near the lowest level since the 1970’s. The Greenback gained a boost after these pieces of bullish news hit the wires.

Today’s markets

19th January 2017

  • GBP - Retail Sales m/m: -1.9%
  • CAD - CPI m/m
  • CAD - Core Retail Sales m/m
  • USD - President-Elect Trump Speaks

The week ends with the inauguration of Donald Trump who will become the 45th President of the United States.  After his first controversial press conference since being elected, markets focus will again be on any comments the President will make.  Monthly Retail Sales from the UK are also released today, forecast to show a drop of -0.1%.

Have a good day.