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February 2017

Euro nervous as Greek debt debated

Published: Monday 20 February 2017

  • Euro nervous as Greek debt debated
  • USD poised to strengthen if Federal Reserve minutes are hawkish
  • Sterling awaits Gross Domestic Product and Government Debt numbers
By David Johnson
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President Trump is the gift that keeps on giving….for satirists that is. A Fox News report apparently led to President Trump warning America about how things are deteriorating in Sweden due to immigration.  The Swedish authorities are baffled by the comments and have asked for an explanation. President Trump seems to be working his way through America’s allies, trying to anger each in turn.
 
Away from the fake news, the markets have been quite lively, but largely within recent ranges. Sterling has bounced back a little after a poor start to last week. The Euro remains under pressure and the USD is still the headline act as far as traders are concerned.
 
Europe’s financial disagreement is focussed on the Greek debt arrangements this week. There is a lot of pressure to get an agreement signed, sealed and delivered between Greece and her creditors. An increasing number believe the ultimate outcome on this or future Greek debt crises will be Greece leaving the Euro and perhaps the EU. The relationship between Greek and International Monetary Fund (IMF)/European Union (EU)/European Central Bank (ECB) negotiators appears to be quite strained. The distinct lack of tier one data from Europe this week will serve to shine an even brighter spotlight on these negotiations. Volatility may well ensue.
 
The UK data highlights of the week revolve around Gross Domestic Product (GDP) growth data and government borrowing figures. More widely reported, though, will be the House of Lords debate on the triggering of Article 50. If Blair and Mandelson have their way, there will be a rebellion and the bill will be damaged beyond repair. That won’t happen. The Lords are on fragile enough ground without trying to subvert the will of the people. Sterling will be bounced around with the various twists and turns, however.
 
The US Federal Reserve is the key feature of this week’s US data. The minutes from their last meeting will give clues as to the hawkishness (or otherwise) of the Open Market Committee and therefore, the likely timing of their next interest rate hike. That release, on Wednesday, could well propel the USD into increased strength if the tone of the committee suggests early interest rate hikes are coming.
 
And well done to Lincoln City Football Club. The Imps have reached the FA Cup Quarter Finals for the first time in 115 years.  I was impressed with Burnley Manager, Sean Dyche’s graciousness and praise in defeat. Good to see.
 

Joke

 
I’ll tell you what, old boy. I tried rugby for the first time last weekend. I think I got the hang of it. In fact, not wishing to blow my own trumpet or anything, but I think I did rather well. I managed to put the ball thingy down in the bit behind the goal posts a few times and, as far as I know, that is the prime raison d’etre for players of the game. Anyway, when I got back to the clubhouse, all everyone kept saying was, “Nice try. Nice try.” Condescending oiks. I’m never going back there, I can tell you!
 
 

Today's Major Economic Releases
 

Market
BST
Data/Event
Previous
Expected
EUR All Day EU: Economic and Financial Analysis Affairs Council Meetings (ECOFIN)    
USD All Day US: Bank Holiday    
GBP 11:00 UK: Confederation of British Industry Industrial Orders Expectations (CBI)  5 5
CAD 13:30 Canada: Wholesale Sales month-on-month 0.2% 0.4%
EUR 15:00 EU: Cons umer Confidence -5 -5

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