PM's comments weaken the pound
After the disappointing jobs data out from the US at the end of the last week, the unemployment rate ticking back up to 4.7% and the number of jobs for December falling short of the expected gains of 175k, the markets have opened today with Sterling falling against its peers.
On Sunday, Prime Minister Theresa May held her first televised interview of the new year, and used this to deny comments of muddled thinking around how the UK is going to move forward with Brexit. May stated that it is about getting the right relationship for the UK with the European Union when we are outside, and that the UK will be coming out of the single market. Once out Theresa May went on to say the UK will then be able to take full control of our laws and borders, but will still look for the best possible deal for companies to trade within the EU. As a result of these strong comments the pound has been sold off this morning, losing ground against its major peers as the hard Brexit comments were again reinforced by the Prime Minister.
The day ahead itself will continue to digest this news from yesterday and could see Sterling fall further. No high tier data is due to hit the wires today so a fairly quiet start to the first full week of the year, although we do have the Eurozone unemployment rate due out this morning with unemployment due to remain at 9.8%.
Overnight, China, the world’s second largest economy, release their yearly inflation figure which is expected to fall slightly to 2.2%. Later in the day attention switches to the US as the Jolts job openings will be watched to see if further jobs have been added, following the disappointed NFP figure on Friday.
- China CPI
- US JOLTS job openings
The UK’s Manufacturing sector comes into the spotlight again as the monthly reading is set to show a marked increase in activity to 0.6%, from previous months -0.9%. Alongside this, Industrial production is posted and is set to show a bullish increase to 0.8%, which if both come out as anticipated could see some gains for the pound.
- UK Manufacturing mom
- UK Industrial Production mom
- US Crude oil Inventories
Eurozone monthly Industrial production gauge is set to follow the upward trend and forecasted to show activity growth by 0.5% on the previous month. Across the pond market attention will be focused on any comments made by two Fed speakers Evans and Harker, to see if they give any clues on the next potential rate rise.
- Euro Industrial Production mom
- FOMC member Evans Speaks
- FOMC member Harker Speaks
Markets will open after Fed Chair Janet Yellen has spoken in Washington. If any clues on when the Fed will next implement a rate rise, or what the FOMC are looking for before taking action, this will no doubt see volatility for the greenback. Staying with the US their monthly Retail Sales for December will be published, and are forecasted to increase to 0.5% from previous 0.1%.
- Fed Chair Yellen Speaking
- UK BoE Credit Conditions Survey
- US Retail Sales mom
- US Prelim UoM Consumer Sentiment
Have a good day