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Trump ordered strikes leads to safe havens strengthening

3rd January 2020 Market Update

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🇬🇧 GBP – Yesterday morning UK Manufacturing PMI slid at its fastest rate since July 2012. The figure came out at 47.5, beneath the forecasted figure of 47.6 and down from the 49.1 reading in November, its lowest level in nearly 8 years. Anything below 50 shows contraction and Reuters reported “a tepid global economy hurt demand and businesses further reduced stocks of goods they had built up in case of a no-deal Brexit”.

Today at 9.30am Markit Construction PMI for December is expected at 45.9 after November’s 45.3. In addition Consumer Credit, Mortgage Approvals, Money Supply and Net Lending figures are released at the same time.

🇪🇺 EUR – EU Manufacturing contracted for the 11th straight month. The figure was released at 46.3 down from November’s reading of 46.9.

At 8.55 this morning the German Unemployment rate is released, expected at 5%, and at 1pm Preliminary German Inflation data comes out.

🇺🇸 USD –  The US Dollar, and other safe havens such as Japanese Yen, strengthened yesterday after the US killed top Iranian general, Qasem Soleimani, in an air strike on Baghdad. This was ordered by US president Donald Trump and media outlets are reporting this could lead to a war. Cable is down 1.4% since the highs of yesterday.

US Manufacturing PMI was released yesterday afternoon at 52.4, a positive reading despite being down from November’s 52.6 figure. There is further US Manufacturing data today – at 3pm ISM Manufacturing PMI for December which is expected at 49.

This evening at 7 US FOMC minutes is released.

 

Summary:

GBP: UK Manufacturing PMI slid at its fastest rate since July 2012
EUR: EU Manufacturing contracted for the 11th straight month
USD: Cable drops nearly 1.5% following Baghdad air strikes

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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