12th February 2018 Market Update
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?? GBP – Data on Friday showed a mixed picture on the economy. Industrial production fell in December due to the shutdown of the Forties North Sea oil pipeline. Manufacturing production came in line with forecasts and construction figures beat expectations. However, the key mover for the pound on Friday was the comments made by Barnier causing the currency to take a tumble by the end of the day.
Key data for the UK this week will come in the form of inflation figures on Tuesday and retail sales data on Friday.
?? EUR – There was no data out on Friday but the single bloc currency suffered due to the inflows into the US dollar.
In focus this week will be GDP figures for the Eurozone as a whole as well as inflation figures from Germany.
?? USD – The dollar continued its recent good run with the dollar index finishing the week above the key 90 level.
Wednesday will be key for the dollar with the release of inflation figures as well as retail sales data. The Inflation reading could well give markets the cue for when the Fed may do their next rate hike.
13/02/2018: Inflation – Expected to drop to 2.9%
16/02/2018: Retail sales – Expected to drop to 0.9%
14/02/2018: German inflation – Expected to drop to 1.4%
14/02/2018: Q4 GDP – Expected to improve to 2.7%
14/02/2018: Inflation – Expected to remain at 2.1%
14/02/2018: Retail sales – Expected to drop to 0.3%
Summary: Sterling suffered a blow on Friday following comments made by the EU’s chief negotiator Michael Barnier, that if disagreements persist then a transitional agreement is not a given. Sterling now sits at a 1 month low against the dollar.
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