Weekly Market Report 12/02/2018

 GBP

Bank of England (BoE) Interest rate decision and Mark Carney’s press conference were the main mover of the Pound last week as the BoE announced they are likely to hike interest rates sooner than expected. Reason for this is the BoE has a more positive outlook on the UK economy and raised GDP growth from 1.5% to 1.7%. Sterling strengthened 1 cent against all major pairs and punched through the 1.14 barrier against the Euro. GBP/EUR had a very volatile week with highs of 1.1441 and lows of 1.1227. Looking forward to the week the main data release is the Consumer Price Index(YoY) for January which is expected to come in at 2.9% down 0.1% from December. Brexit negotiations are ongoing and with increasing pressure in the conservative party Sterling is expected to remain under pressure throughout the week.

EUR

Strong economic data from the Eurozone last Monday saw the single currency have a strong start to the week. Consumer Price Index for January came in above expected showing continued strength for the European economy. This has given hope the European Central Bank (ECB) will look to end its quantitative easing program over the coming months. Towards the end of the week Euro last ground on the Dollar and retreated into the 1.22s for the first time in 2 weeks. Looking at the week ahead the main mover for the Euro will be the release of the Gross Domestic Product (YoY) for Q4 and the Gross Domestic Product (QoQ) for Q4. The QoQ is expected to remain the same at 0.6% whilst the YoY is expected to rise 0.1% to 2.7%. With continued strength in the Eurozone the single currency is expected to remain strong for the week ahead.

USD

Strong week for the US Dollar as USD gains around 2 cents against the Pound and Euro gaining back its losses from 2 weeks ago. The huge volatility in the equity markets did very little to weaken the Dollar and the Greenback made it’s gains from steady inflation data and possibility of an interest rate hike at the end of this month. Main mover for the Dollar this week will be the release of the Consumer Price Index (YoY) for January and Consumer Price Index Ex Food and Energy (YoY) for January both expected to remain as previous. US Dollar is expected to remain stable for the week ahead with key data expected to come in as previous and with the Dow Jones recovering from it’s losses there is very little risk for in the US for the week ahead.

 

Data Releases

Tue – GBP Consumer Price Index (YoY) (Jan)

Wed – EUR Gross Domestic Product (QoQ) (Q4)

Wed – EUR Gross Domestic Product (YoY) (Q4)

Wed – USD Consumer Price Index (YoY) (Jan)

Wed – USD Consumer Price Ex Food & Energy (YoY) (Jan)

 

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