17 January 2020
The Pound advanced across the board yesterday, boosted by upbeat Brexit headlines. The first came from the UK government, who reiterated there would be no extension to the deadline set out. There were further positive tones from the EU side, as German Chancellor Merkel stated the deal would force the EU to become more creative and competitive to maintain unity amongst member countries.
German CPI for December came in line with expectations causing little reaction. The Eurozone figures faired a little better, with car sales for December jumping 21.4% on the year for December. The figures show a strong recovery after the diesel emissions scandal hit figures hard in 2018. The strong data showing saw a slight uptick in the euro.
The dollar was on the back foot in early trading as the market digested phase one of the US-China trade deal. With no mention of levies, it is clear plenty of work is required to shift sentiment and the overall reaction was underwhelming. Greenback demand did pick up however, after an upbeat retails sales, up 0.3%. Initial jobless claims also beat expectations, maintaining the positive tone.
Data and Events
UK retail sales will be in focus this morning as it will be an important measure, feeding into the BoE rate decision later in the month. In addition, the EU unveils the final version of CPI. Later in the day, the US publish Building Permits and Housing Starts for December. The important Michigan Consumer Sentiment Index is also out, with a 99.3 showing expected.
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