We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.
Hide

February

Pound treading water ahead of a busy week

Published: Monday 05 February 2018

  • Watch out for a hive of central bank activity
  • Brexit tensions could weigh on Pound
  • Euro stuck in the middle as German coalition deadline not met
By Jonathan Russel
 
 
Watch out for a hive of central bank activity

Ahead of a busy week on the calendar the Pound was treading water during early trading so far. Three central banks will meet this week, Reserve Bank of Australia (RBA), Reserve Bank of New Zealand (RBNZ) and Bank of England (BoE). All are expected to keep monetary policies unchanged. The BoE will be the major focus with the quarterly Inflation Report featured. It is likely that they will leave rates at 0.5%, however rates are forecast to rise later in the year. 13 out of 32 economists predicted the next rate hike will be some time in May while as many predicted it to happen in August.

Brexit tensions could weigh on Pound

EU Brexit negotiator Michel Barnier will meet with UK Prime Minister Theresa May and Brexit Secretary David Davis in Downing Street today. Tensions intensified last week on the topic of whether the UK will stay in the EU customs union, or just strike some custom arrangements. There are criticisms of the Cabinet being vague and divided, with May sticking to one policy, while the Chancellor backs another. It’s clear that there are major divisions within the cabinet and if this manifests into a wider leadership challenge, Sterling will certainly take a hit.

Euro stuck in the middle as German coalition deadline not met

In Germany, Chancellor Merkel's CDU/CSU and the Social Democrats couldn't conclude the coalition negotiations in time to meet the self-imposed deadline of Sunday. The negotiations will move forward today as both parties show optimism that a settlement can be reached. The single currency remains range bound for the time being.

Key economic data released this week

There is also some important economic data to watch, including the UK Services Purchasing Manager’s Index, the US Institute of Supply Management (ISM) Services figures, Australian Retail Sales and New Zealand employment data. These will all be very closely watched.
Parrot selling

I’m selling my talking parrot. 
Why? 
Because yesterday, the little beggar tried to sell me.

Today's Major Economic Releases

Market BST Data/Event Previous Expected
NZD All Day New Zealand: Bank Holiday    
EUR 09:00 EU: Final Services Purchasing Managers' Index 57.6 57.6
EUR 09:30 EU: Sentix Investor Confidence 32.9 33.2
GBP 09:30 UK: Services Purchasing Manager' Index 54.2 54.1
EUR 10:00 EU: Retail Sales 1.5% -1.1%
USD 14:45 US: Final Services Purchasing Managers' Index 53.3 53.3
USD 15:00 US: ISM Non-Manufacturing Purchasing Managers' Index 55.9 56.5
EUR 16:00 European Central Bank President Dragi Speaks    

For more information, infographics and the latest currency insights, visit www.halofinancial.com/news