7th December 2017 Market Update
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?? GBP – With no data releases yesterday, the pound moved at the mercy of other currencies. Brexit related news is still very much the driver as markets await further news on a solution to the Irish border issue that will satisfy the UK, EU and the DUP, something that has so far proven elusive. PM Theresa May is hoping to have these non-trade issues wrapped up by next week when the EU summit takes place, so she can move on to trade talks. Though, there are growing concerns of her ability to make headway with the EU Commission President, Jean-Claude Juncker airing his concerns that the UK Government would collapse should Brexit talks fail, with Tory MP’s urging the PM not to allow the DUP to impose their own conditions and dictate terms that could ruin a deal. Today, again we have no data releases and the Brexit talks will continue to be the main focus.
?? EUR – German factory orders provided a boost for the euro early in the day yesterday, pointing towards a robust recovery in the nation. Though with little else to go with during the day the euro retraced it gains against the pound.
Today, German industrial production figures have missed the mark this morning but has made little impact on the euro. Markets will await third quarter GDP figures, though expected to remain the same. Later in the afternoon ECB President will take part in a press conference but is unlikely to provide any material news ahead of the ECB meeting next week.
?? USD – Unemployment figures helped buoy the dollar yesterday as the precursor to the all-important non-farm payrolls on Friday posted a healthy reading in the afternoon.
Today, there is very little on the calendar with weekly jobs figures out this afternoon. As such, focus will remain on the US tax reform and the potential partial US Government shut down tomorrow as funds run out, unless a spending bill is agreed by congress. However, the likelihood of a shutdown is minimal.
10:00am: GDP Q3 expected to remain unchanged at 0.6% QoQ
16:00pm: ECB Draghi’s Speech
13:30pm: Initial and continuing jobless claims
Summary: Brexit talks remain the key focus as the UK Prime Minister comes under further pressure to come to an agreement on the Irish border issue ahead of next week’s EU Summit. Sterling will likely remain volatile though economic data releases remain at a premium.
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