Thursday saw the latest Monetary Policy Committee (MPC) report from the Bank of England. The BoE stated that “further modest increases” in interest rates are probable, as the Bank tries to bring inflation in line with its 2% target in the coming years. The MPC appeared to be unconcerned with inflation rising to 3.1% last month and voted unanimously at their December meeting to leave interest rates at current levels. The MPC is waiting to see where inflation will be in early 2018, along with the progress of Brexit negotiations, which will form a major part of their February Inflation Report.
The European Central Bank kept its ultra-easy monetary policy unchanged on Thursday, keeping interest rates low for an extended period and pledging to provide additional stimulus if required. At a press conference, ECB President Draghi commented “The difference in the monetary policy decisions and therefore interest rate decisions (with the US) reflects the different position in the economic recovery, which incidentally is stronger now in Europe. However, it is more advanced in the US. We haven’t seen (any negative effect on the euro zone economy from the divergence in policy).” Going on to say, “The incoming information, including our staff projections – our new staff projections – indicates a strong pace of economic expansion and a significant improvement in the growth outlook.”
The Swiss National Bank (SNB) kept its current monetary policy in place on Thursday, although the SNB does expect Swiss inflation to exceed its target in 3 years, a possible insight as to when it might end its ultra-loose monetary policy. SNB Chair Jordan stated that they were in “no rush at all” to start normalizing policy, whilst other central banks have started to hike rates. Jordan commented that the CHF remained “highly valued”, despite the currency losing approximately 7% in value over the last 6 months.
With inflation a somewhat “hot-topic”, the US Commerce Department on Thursday released data showing US retail sales rose more than forecast in November and the previous month was revised higher, indicating a broad strengthening of consumer demand as the holiday shopping season got underway. November retail sales rose 0.8% with a revision of Octobers data up to 0.5% from the previously released 0.2%. In the UK, the Office for National Statistics released Retail Sales data for November that showed sales volumes were up 1.1% in the month, exceeding the 0.4% forecast by the market.
EURUSD is little changed overnight, trading around 1.1783.
USDJPY is unchanged in early session trading at around 112.35.
GBPUSD is trading around 1.3436.
Gold is 0.15% higher in early Friday trading at around $1,255.
WTI is 0.1% higher, trading around $57.20.
Major data releases for today:
At 10:00 GMT: Eurostat will release Trade Balance data for the Eurozone for October.
At 13:15 GMT: Bank of England Chief Economist, Andrew Haldane, is scheduled to speak at the 26th International Rome Money Banking and Finance Conference in Italy.
At 14:15 GMT: The Board of Governors of the Federal Reserve will release US Industrial Production (MoM) for November. Forecasts suggest a release of 0.3%, which is significantly lower than the previous release of 0.9%. The markets could experience USD volatility if the release is dramatically different from forecast.
At 14:15 GMT: US Capacity Utilization for November will be released by the Federal Reserve Board. Forecasts suggest a modest improvement to 77.2% from Octobers’ 77.0%.
At 18:00 GMT: The Baker Hughes US Oil Rig Count will be released. The number of active US Oil Rigs has grown throughout 2017, with the last release showing a count of 751. As more active rigs come online production increases which can dampen crude prices.
FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Bitcoin price extends retreat from $69K as old whales shift their holdings to new whales
Bitcoin price continues to move further away from the $69,000 threshold, gaining ground as BTC bulls hope for a retest of the $73,777 peak. This is because of the general assumption that clearing this blockade would set the tone for a reach higher, marking a new all-time high.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.