Morning Report: 11 December 2017
December 11, 2017
GBP G10 FX has had a slow start to the week, and sterling is no exception, trading close to open against most of its major partners after the strength from Friday’s dramatic Brexit developments proved fleeting. This will be a potentially decisive week for sterling, with top tier data releases in the form of inflation on Tuesday, labour market data on Wednesday, and the Bank of England’s latest rate announcement on Thursday. In the meantime Friday’s breakthrough in Brexit negotiations is likely to remain a subject of controversy, with Theresa May reportedly due to tell Ireland that Friday’s announcements are not binding.
EUR The euro was quiet last week, coming under mild pressure against GBP and USD, and opening well this morning against NOK on weak Norwegian inflation data. A few tidbits of data will be released this week, including the widely followed ZEW survey for the German economy tomorrow morning, and eurozone unemployment on Wednesday. Thursday will see the European Central Bank announce its latest rate decision, including a press conference given by President Mario Draghi.
USD USD continued to gain broad momentum last week, with the US sovereign yield curve continuing to flatten as market participants prepared for more rate increases from the Federal Reserve, but remained sceptical about the economy’s long term growth trajectory. This week’s Federal Open Market Committee rate announcement on Wednesday is the last major event on the year’s calendar, and will feature updated forecasts for the economy and interest rates, as well as a press conference from outgoing Fed Chair Janet Yellen. Given that job creation remains steady, wages are rising, and the economy is growing a hike at this week’s meeting is all but assured, and USD effects will focus on the messaging surrounding the decision. Today at 15:00 GMT the Job Openings and Labour Turnover Summary will be released.
CAD The loonie remained on the back foot for all of last week, and has only managed to pare Friday’s losses back slightly this morning. This will be a quiet week, with the only major releases coming on Thursday in the form of Manufacturing Sales and the New House Price Index. NAFTA talks will continue this week, but it will be a focussed round of talks that will avoid major sticking points.
- Reuters: Labour Party looks to move some BoE functions away from London. Britain’s Labour Party is considering moving some of Bank of England’s functions to Birmingham, from its current home in Threadneedle Street in the City of London, according to an interim report on the British financial system released on Sunday.
- Telegraph: Lord Kerslake quits as NHS trust chairman over ‘unrealistic’ funding cuts A fundamental review of the NHS is needed to address a financial crisis, Lord Kerslake said, after quitting as the boss of a major hospital trust in protest at funding problems.
- Daily Mail: Third of GPs plan to close surgeries to new patients: Doctors say drastic action is needed. One three family doctors plan to close their surgeries to new patients, a survey found. They claim that without drastic action they will be unable to give safe care to those already on their books. One in ten GPs said they had already closed surgery lists to new patients temporarily within the past 12 months.