Morning Report: 3 January 2018
January 3, 2018
GBP Sterling posted its highest level against the US dollar since September, and showed most other major currencies its heels yesterday as well. The strength came despite Manufacturing Purchasing Manager Index data disappointing with a score of 56.3, versus 58.0 expected, but this was not enough to restrain the British pound. Today the PMI of the construction sector is expected at 9:30 GMT.
EUR Euro continued the strength we saw at year end, reaching the highest point on the EURUSD cross since September last year, and gaining against the rest of its G10 peers as well. Manufacturing data from the Eurozone yesterday was strong, and news out of the high towers of the European Central Bank added to the bullish sentiment that buzzed around the single currency yesterday, with ECB Governing Council member Benoit Coeure suggesting that the Asset Purchasing Program may not be extended again. Today we have the German Unemployment change at 8:55 GMT.
USD The greenback had a bad start of the year and slumped 0.4% against all the other G10 currencies, though this morning a jump in treasury yields seems to have put it on a more solid footing. Markets were unmoved by chatter from President Trump, who engaged in a classic “who’s got the biggest” contest by tweeting that his nuclear button is both “bigger” and “works”, in response to reports that the North Korean leader Kim Jong Un said that he has a nuclear button on his desk. Today at 15:00 GMT we have the ISM Manufacturing PMI and at 19:00 the Federal Open Market Comittee meeting Minutes are released.
CAD In a calm new year’s market the loonie started off well with a small gain against the US dollar which had it reach its strongest point on the cross since last October. Undoubtedly developments in the commodity markets played some role in this, as WTI oil traded above $60 a barrel, which marked its highest level since June 2015. The Canadian manufacturing PMI stood at 54.7, slightly up from 54.4 last month, with many indicators that the economy is booming. The business conditions improve at the fastest pace since January, new orders are on the rise and delivery times that lengthen sharply. Today’s data calendar is strikingly empty.
- Reuters: UK building firms see growth slow in December – PMI. Growth in Britain’s construction sector slowed last month for the first time since September, as weaker growth in house-building combined with a fall in commercial building and stagnating infrastructure work, a survey showed on Wednesday.
- Telegraph: Nicola Sturgeon urged to drop tax hike after 15 per cent rise for Scots’ energy and insurance bills. Nicola Sturgeon has been urged to drop plans for an income tax hike in April after it emerged Scottish households were hit with a 15 per cent increase in their energy and insurance bills last year.