Market Report Busy Week to Rock the Boat

13 February, 2017

Tom Arnold

Last week was relatively quiet on the currency markets, with little critical data of note and as such somewhat limited movement for the major currency pairs. Brexit was back to the fore in the UK, with various debates and votes taking place, and as a result, we find the government’s Article 50 bill is through the Commons, with the Lords now the only potential stumbling block. The prospect of Article 50 being triggered is of severe concern to Sterling analysts, as it is almost sure to cause a significant drop in Pound strength, as we enter a very long period of uncertainty, with complicated negotiations to the fore. But for now, the fact that the government is not losing any of these votes and appears to be in control of the whole situation seems to be supporting a relatively stable Pound.

The Trump effect seems to have settled somewhat too, with the President quietly taking a more party line on many of his previously aggressive views. The only real problem still to unfold is the immigration ban and whether Trump could reinstate it with an appeal to the supreme court. While this plays out, we can expect some continued volatility for the Dollar, and with his Twitter account still active, anything could happen!

The week ahead is a very busy one, albeit with an incredibly quiet start. There is no data due out today at all, but it is fair to say tomorrow more than makes up for it, with various inflation releases, GDPs and producer price indices due from all the major economic zones. Wednesday also weighs in with a raft of relevant data including UK unemployment, before things start to quieten down as we near the weekend. Thursday and Friday do still throw up some notable releases, though, most notably UK retail sales on Friday morning.

German CPI inflation
German GDP
German ZEW economic sentiment survey
European GDP
European industrial production
European ZEW economic sentiment survey
UK CPI inflation
UK RPI inflation

ECB non-monetary policy meeting
European trade balance
UK unemployment rate, claimant count and average earnings
US retail sales
US CPI inflation
US industrial production

Australian unemployment rate
ECB monetary policy meeting accounts
EU leaders summit
US initial jobless claims

European current account
European construction output
UK retail sales

The relative stability we saw last week is likely to be tested by the sheer volume of critical data due this week, and as such you should make sure to stay in close contact with your CI account manager to be kept informed of exactly what is happening and when. The larger picture is also worth monitoring closely, as any sign the Lords might not play ball with the government’s Article 50 bill could cause uncertainty to strike the Pound hard. Unelected peers, unbeholden to the will of the people are not under so much pressure to conform to that will, could indeed be the stumbling block the government has so far avoided.