Morning Report: 9 January 2018

January 9, 2018

GBP Sterling largely shrugged off yesterday’s political drama in the UK . It seems a bit early in the year to start burning through the political hot take cliches, but Theresa May’s cabinet reshuffle descended into farce yesterday as various cabinet jobs were rebranded or subject to typos in official communication, ministers refused to move, or outright resigned. Overnight the British Retail Consortium released its Retail Sales Monitor, which tracks official Retail Sales fairly well. The index suggested retail sales growth had cooled slightly in the final three months of the year, with non-food sales falling an average of 1.4% compared to a year earlier.

EUR The euro was in full retreat yesterday, falling steadily against USD after last week’s buoyant price action on EURUSD. Better than expected Sentix Investor Confidence and surprisingly good Retail Sales figures did nothing to support the single currency. This morning’s data has included strong German Factory Orders, which rebounded 3.4% after several months of declines. The eurozone Unemployment Rate will be released at 10:00 GMT.

USD The dollar continued to appreciate against a broad swathe of major currencies yesterday, but took a knock against the Japanese yen overnight. Atalanta Federal Reserve president Raphael Bostic gave a fairly generic assessment of his view on rate hikes this year, saying a slow removal of accommodation was appropriate, but that three or four hikes a year may be too fast. The NFIB Small Business Index will be released today at 11:00 GMT, followed at 15:00 by the Job Openings and Labour Turnover Summary, a leading indicator of labour market tightness.

CAD The loonie’s progress against USD stalled yesterday, despite the latest Bank of Canada business outlook survey suggesting the economy was facing capacity constraints and rising wage pressure. The overall tone of the survey was optimistic, concluding “sustained demand” was driving expansion plans in businesses. Today at 13:15 GMT Housing Starts will be released.

UK news

  • Telegraph: Night of the blunt stiletto. Jeremy Hunt refuses job as business secretary as Justine Greening quits over Cabinet reshuffle Theresa May’s hopes of asserting her authority with a Cabinet revamp fell flat after senior ministers derailed her reshuffle by refusing to budge from their jobs.
  • Guardian: Toby Young resigns from the Office for Students after backlash. Toby Young has stepped down from the Office for Students less than 24 hours after the universities minister issued a robust defence of his position in the Commons, amid a huge backlash over the free schools champion’s appointment.

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