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December 2017

Sterling springs up on Brexit progress

Published: Friday 08 December 2017

  • Sterling springs up on Brexit progress
  • New Zealand manufacturing shows significant improvement
  • China’s trade shoots up
By David Johnson

Brexit boost for British Pound
 
News that the UK and EU have reached some level of agreement on the Brexit deal lifted Sterling overnight. The Pound gained a cent and a half against the Euro and is up nearly a cent against the US Dollar as well.  European Union negotiator, Jean-Claude Juncker, said the talks can now move to the next matter; that of the relationship between the two sides after Brexit. Sterling got another boost from this morning’s release of UK industrial production, which rose at a faster pace than expected and was up on the previous month (annualised). At the time of writing, we are awaiting the National Institute of Economic and Social Research (NIESR) estimate of Gross Domestic Product (GDP) growth in the three months to November. The forecasts are surprisingly positive, so there is room for disappointment. Traders will be quick to take profits if that is so.
 
New Zealand manufacturing on the up
 
Overnight we heard that New Zealand manufacturing sales volumes were up in the three months to September as chemicals and plastics forged ahead. No doubt the GBPNZD rate would have fallen, were it not for the positive Brexit news. In the end, this pair stayed pretty much static overnight.
 
Chinese exports increase spells good news
 
We also saw data overnight that showed Chinese exports rose significantly in November. On an annualised basis, imports were up 17.7% and exports, 12.3%. Both figures were massively better that the forecast 11.3% and 5.0% respectively. That bodes well for the countries that export raw materials to China and it is a bellwether for the demand from China’s customers’ economies. And that’s pretty much all of us.
 
Spotlight on US Employment
 
Today’s big data – in a very busy diary – is the US employment report. A gain of 200,000 jobs or thereabouts would see the USD tread water, but any more and we will see USD gains. Analysts are desperate for some further evidence that interest rate hikes are necessary and that would be a feather in their cap.
 
Surcharge for stupidity?
 
And the Metro is reporting that Firefighters had to spend hours breaking a prankster free after he and his friends plastered his head into a microwave oven in order to make money through YouTube. Surely there ought to be some mechanism to bill him for the firefighters’ time. Self-inflicted stupidity must carry a cost, mustn’t it. 

Behind today’s Advent Calendar door…

It wouldn’t be Christmas without cat videos!

Here’s a look at the fun and festivities of the season from a cat’s eye view…
 
Diagnosis

“Doctor, you need to help me”, said the woman sitting opposite him.

“What is the problem?” asked the GP.

“When I woke up this morning, I looked at myself in the mirror and saw my hair all wiry and frazzled, my skin was all wrinkled and pasty, my eyes were blood-shot and bugging out, and I had this corpse-like look on my face! What's wrong with me, Doctor?"

He looked at her for a while and turned back to his desk before he said, “well, at least we know your eyesight is pretty good.”

Today's Major Economic Releases

Market BST Data/Event Previous Expected
GBP 09:30 UK: Manufacturing Production 0.7% 0.1%
GBP 09:30 UK: Goods Trade Balance -11.3b -11.5b
GBP 09:30 UK: Construction Output -1.6% 0.2%
GBP 09:30 UK: Consumer Inflation Expectations 2.8% 2.8%
CAD 13:30 Canada: Housing Starts 223k 214k
USD 13:30 US: Average Hourly Earnings 0.0% 0.3%
USD 13:30 US: Non-Farm Employment Change 261k 198k
USD 13:30 US: Unemployment Rate 4.1% 4.1%
USD 15:00 US: Preliminary UoM Consumer Sentiment  98.5 99.0

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