Positive post-Christmas sentiment turns US markets green.
December 27, 2018
Sterling remains range bound against USD and EUR, amid thin news flow. This morning the Institute of Directors released survey data showing that confidence among members was at an 18 month low, with heads of large companies giving particularly pessimistic responses. No further data will be released today.
With action focused elsewhere and thin news flow, the single currency was stuck among the worst performers against the dollar yesterday. With the Italian budget drama far from the scene now and no more recent headlines on French protests, the euro seems to be patiently staying within recent trading ranges. This morning’s sole release of note was the ECB’s economic Bulletin at 09:00 GMT, which contained little market moving news.
USD sat comfortably in the green zone yesterday on the back of a surge in stock markets. With the S&P and the Dow Jones indexes rallying by 5% and the Nasdaq having its largest one-day increase since 2009, Wall Street seems to be enjoying some belated Christmas cheer. A few positive headlines may have helped. Firstly, White House officials denied rumours of Federal Reserve chairman Jerome Powell possibly being fired. Second, POTUS Donald Trump himself gave equities a jawbone, talking about “tremendous” opportunities in the markets. Finally, reports emerged that a government delegation will continue trade conversations in Beijing in early January. Today the House Price Index will be released at 14:00 GMT, followed by consumer confidence at 15:00.
The loonie did well compared to the other G10 currencies yesterday, after crude prices rallied on headlines from Russia. Russian Energy Minister Alexander Novak said that the agreements made by Opec members and other larger producers earlier this month to cutting output will contribute to price stability in the first half of 2019. Together with yesterday’s equities rally, the statement saw an almost 9% increase in crude benchmarks Brent and WTI, which moved to the $54,87 and $46.22 levels respectively. Today’s session has so far seen both benchmarks pare back yesterday’s gains. The CFIB Business Barometer will be released at 11:00 GMT.