Morning Report: 2 January 2018

January 2, 2018

GBP Sterling has come off reasonably well from the volatility seen overnight, benefitting against the US dollar and seeing only small losses since midnight against the euro. The year’s first significant data release will be today’s Manufacturing Purchasing Managers’ Index, at 09:30 GMT. The release will be accompanied by mortgage Equity Withdrawal figures from the Bank of England. Later this week equivalent PMIs for the Construction and Services sectors will be released on Wednesday and Thursday respectively.

EUR The euro has had a cracking start to 2018, advancing to its highest level against USD since September 2017. There’s been little in the way of data or headlines to drive the move, but European sovereign yields have increased sharply in recent weeks, reflecting increasing expectations of growth, inflation, and policy normalisation. As with sterling, Manufacturing Purchasing Managers’ Indices were released this morning for eurozone economies.

USD USD is in a tailspin this morning, following a bruising series of losses last week that has seen the weighted greenback index DXY fall some 1.5% since Christmas. Today’s data will include the Manufacturing Purchasing Managers Index from Markit, at 14:45 GMT. Later in the week, the Non-Farm Payrolls report will be out on Friday.

CAD Like all other major currencies the loonie is up against USD this morning, although it has made less progress than the rest of its G10 peers. Manufacturing Purchasing Managers’ Index data will be released today at 14:30 GMT

UK news

  • Reuters: Britain wants financial services included in EU trade deal – Davis. LONDON (Reuters) – Britain wants to include financial services in a trade deal with the European Union which covers a full sweep of economic areas, Brexit minister David Davis said on Tuesday.
  • Guardian: Rail bosses seek to defend UK train fare rises amid protests at stations. Rail bosses have defended the biggest annual increase in train fares in five years in the face of dozens of demonstrations against the rise by commuter groups and unions at the UK’s busiest stations.

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