- UK Conservatives extend lead over Labour in latest YouGov poll – The Sun
- BOE’s MPC likely to suspend QE in February – The Independent
- Greece’s plan to cut deficit to 3% EU limit in 3 years was government’s own decision -FinMin
- Swiss December s.a. unemployment 4.2%, as expected
- German November trade balance 17.2 bln, better than median forecast of 12.4 bln. Exports +1.6% m/m, Imports -5.9% m/m
- Japan PM Hatoyama: Desireable for forex rates to move in stable manner
- UK December output prices +0.5% m/m, +3.5% y/y, stronger than median forecasts +0.2%, +3.1% respectively. Input prices +0.1% m/m, +6.9% y/y, stronger than median forecasts of -0.2%, +6.5% respectively
- Euro zone November unemployment hits 10%, worse than median forecast 9.9%, highest rate since August 1998
- Euro zone final Q3 GDP unrevised at +0.4% q/q, as expected. Y/Y rate revised to 4.0% from 4.1%
- German November industry output +0.7% m/m, weaker than median forecast of +1.0%
- German EconMin says says upward trend in industry output likely to weaken given restrained orders
Main feature of morning trade has been the general improvement in sterling’s fortunes. The move comes with the latest opinion poll showing the conservatives extending their lead over Labour. Elsewhere there’s a growing feeling that the BOE is done with it’s QE programme, at the very least putting it on hold come February (see above Independent article) The market will have also noted factory gate inflation gathering pace in December (see above). Early rate hike anyone? (only joking……I think)
EUR/USD hasn’t done much at all and at 1.4310 is effectively unchanged on the day awaiting US jobs report. There were a couple of dips below 1.4300 but buying by BIS and “sovereigns” has lent support. Decent sell orders touted up at 1.4350, but they’ve never come into play, the session high 1.4335.
Cable up at 1.6015 from early 1.5945. Stops tripped on move through 1.6000 and we’ve been as high as 1.6035. UK clearer notable buyer. Talk of offers up at 1.6040/50.
EUR/GBP down at .8930 from early .8975, French name seen aggressive early seller.
USD/JPY sits at 93.20, effectively unchanged on the day, recovering from a dip through 93.00 which extended to 92.85. The dip through 93.00 seemed to coincide with Hatoyama’s comment that it is desireable for forex rates to move in stable manner. It would probably be best if the new Japanese government wants price stability for them just to say nothing. Unfortunately the new finance minister has probably let the cat out of the bag.