Last week, the news was dominated by reports from the U.S and Iran, which meant that we saw more movement on commodities such as Oil, Gold & Silver. Sterling was fairly static over the week and managed to stay in and around the same areas, in fact as the closed the week GBPEUR was around 0.13% higher than it begun last week, which has shown some resilience.
Other important news last week came from the BoE when Governor Mark Carney stated that stimulus may be needed this year, and hinted at a possible rate cut. This is not priced in at the moment, however, we must now take into account that if we see any issues with the UK economy, then the Central Bank have this move in their back pocket if needed. The markets will be waiting to see over the next few months if we see a “Boris Bounce” following our new political certainty, so let’s wait and see.
In other news, there seemed to be less optimism from Ursula von der Leyen, the new European Commission President, after her comments about a deal being “basically impossible” to ratify by the end of the year. After a few years of Brexit negotiations, we know better than to believe every comment we hear, so there wasn’t much movement from the market, but, this was a reminder that Brexit will still be something to watch this year, all eyes will be on the deal and the December deadline, right now I see no reason why it wouldn’t go through, but as we have seen with the U.S & China, they love volatility and making sure it is not a simple deal to be agreed, so we will need to also keep an eye out on this over the year.
Moving on to economic data now (Yes, it will actually matter this year!) I have listed below the main releases to look out for;
Monday January 13th
- UK Industrial Production (Expected at -1.3%)
- UK Manufacturing Production (Expected at -1.6%- 0.3% worse than last time.)
- UK Trade Balance- (Expected to come out positive)
Tuesday January 14th
- U.S CPI (Inflation) (Expected to rise to 2.4% from 2.1%)
Wednesday January 15th (My Birthday)
- German GDP (Expected to drop to 0.6% from 1.5%)
- UK CPI (Inflation)- (Expected to remain the same at 1.5%)
- The Fed will also release the Beige Book (Economic Summary done 8 times a year)
Friday January 17th
- UK Retail Sales (Expected to rise to 3% following Black Friday & Cyber Monday sales)
- Eurozone CPI (Inflation)-(Expected to rise to 1.3% from 1.0%)
Overall it should be a pretty busy week, with a lot of data releases to keep the markets volatile- if you have a upcoming transaction and would like to learn more about navigating the markets, please don’t hesitate to contact me directly.