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January

Euro down after German data but should rebound

Published: Monday 08 January 2018

  • German political negotiations watched closely
  • US Dollar awaits Federal Reserve Speakers
  • UK and EU political discussions in focus
By David Johnson

Could the Euro see a reversal of fortunes this morning?
 
A public holiday today in Japan meant the markets spluttered into life this morning and it wasn’t until German factory orders showed a slowdown but remained in the growth zone that markets really reacted. The Euro is a tad weaker after that news but, if Eurozone industrial confidence and retail sales data is as bullish as the forecasts suggest, I think we will see a reversal of that weakness after 10.00 am GMT. Obviously, if the forecasts are off, the opposite will be true. That is all there is as far as data is concerned today but there are other factors to contend with…
 
US Dollar awaiting policymaker speeches today
 
We have a slew of Federal Reserve speakers later today and all have the potential to shift US Dollar sentiment. There appears to be an increase in those who expect another near term US interest rate hike and that is stabilising the US Dollar. However, there is some offsetting of that situation due to a recovery in the price of oil.
 
UK and EU political discussions in focus
 
On this side of the Atlantic, negotiations are at the heart of things. Angela Merkel is trying to negotiate a deal with other parties to form a coalition and there is no certainty of that. In the UK, Prime Minister Theresa May is shuffling her cabinet and trying to get a team together who will help her secure a Brexit deal that we can work with.
 
So, Monday could well be a quiet one, but the rest of the week has plenty of data and intrigue and we’ll keep you abreast of all that as it arrives.
 
Meteorological madness
 
In the meantime, whilst parts of North America are suffering minus 38 degrees Celsius, a road in Victoria, Australia, is reported to be melting in a plus 38 degrees Celsius heatwave. I think a little context is necessary; in 1973, Plateau Station in the Antarctic suffered minus 73 degrees and Death Valley in California averages plus 47 degrees and the high winds blew my garden furniture all over the place this weekend. It’s a nightmare.
Joke

A woman phones her daughter and says, “Honey, in that text language you kids use, what does it mean when someone writes IDK?”

The daughter says, “I don’t know.”

“Dammit!,” says the mother, “I’ve asked everyone and no one seems to know.”

Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR 09:30 EU: Sentix Investor Confidence 31.1 31.5
EUR 10:00 EU: Retail Sales -1.1% 1.4%
CAD 15:30 Bank of Canada Business Outlook Survey    

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