The ECB meeting on Thursday

Jens Peter Sørensen Danske Bank A/S

Market movers today

The main event today is the speeches by the ECB’s Yves Mersch and Peter Praet ahead of the ECB meeting on Thursday.
There will not be any significant economic data releases today. The main events in the week include the speech by UK Prime Minister Theresa May on Brexit on Tuesday as well as the ECB meeting on Thursday. Furthermore, there are two speeches due to be given by the Fed’s Janet Yellen. Finally, on Friday, there is the inauguration of President-elect Donald Trump.
The earnings season continues this week with Morgan Stanley, Goldman Sacs, Citigroup, American express and IBM. The World Economic Forum is kicking off this week as well.

Selected market news

GBP is again under pressure versus the other major currencies in Asian trade as the market is expecting Prime Minister Theresa May to signal a ‘hard Brexit’ at her speech on Tuesday. Expectations for a hard Brexit were fuelled by a series of newspaper reports over the weekend. USD/GBP was below 1.20 briefly in early Asian trade. The yen has also been strengthening against the US dollar this morning.

Speculation regarding a ‘hard Brexit’ has also been weighing on the Asian equity markets this morning. We have seen most markets decline. The US markets will be closed today for Martin Luther King Day.

Download The Full Daily FX Market Commentary

Author

Jens Peter Sørensen

Danske Bank A/S

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.