US and China agree phase one deal

16th January 2020 Market Update

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?? GBP - The latest release from the Bank of England has priced a January 30th rate cut in as 64%, mainly because UK inflation for December came in at 1.3% which is 0.7% below the BOE’s target. The pound now sits 3-4% lower against both USD and EUR post-election.
There are no notable data releases expected from the UK today.

?? EUR - The euro remains mostly stagnant and is reacting to other currencies movements rather than the zone's data releases or political advancements. Today we await the ECB minutes for December, as always, the tone Christine Lagarde (ECB President) chooses to strike, will dictate any movement for the single currency.

?? USD -  The US and China have finally signed a ‘phase one deal’ to pause the trade war, whilst leaving in place tariffs on hundreds of billions of dollars of Chinese imports. This will naturally relieve some of the pressures on the global markets, which has been ongoing for nearly 2 years. The dollar hasn’t strengthened off the back of the agreement, with FT analysts citing that ‘this is merely a temporary relief from the trade war between the two global economic powerhouses, and there are still many more hurdles to jump, if they are to resolves their issues completely.’

Retail Sales will be released today, and are expected to increase from 0.3% to 0.5%

Summary:

GBP: Odds Rise on interest rate cut
EUR: Euro benefits from weaker Dollar
USD: Dollar weakens despite trade deal

 

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