Lots of data but little movement
28/Feb/2014 • Currency Updates•
With no data out of the UK, Thursday was a relatively quiet day for the pound. It stayed pretty flat over the course of the session against the Euro, only registering a slight drop towards the end of the day. It was a little more volatile against the dollar, falling half a cent early on before making the same amount back and more after lunch. It finished very marginally up heading to the close of the day.
The German Chancellor, Angela Merkel, made a flying visit to the UK yesterday, where she met the Prime Minister for informal talks. During a speech to Parliament, Ms Merkel, who will be a key player in any renegotiation of the UK’s place in the EU, gave a boost to David Cameron in saying that she was prepared to work with him on reform. This is good news for the PM as he tries to please both sides of the European dividing line among voters.
Mark Carney will be delivering a speech to the German central bank in Frankfurt in the afternoon. As with Yellen’s speech in the US yesterday, the style and tone of his remarks will be more key than the content.
The Euro managed to hold pretty steady yesterday, actually finishing almost level with where it started.
We saw poor data from Spain in the form of GDP; better data from German unemployment; impressive economic sentiment and industrial confidence readings from across the EU; as well as disappointing German inflation data.
Although we saw a myriad of data from the EU yesterday, markets were subdued. As tensions in the Ukraine begin to rise again it seems that markets are watching and waiting rather than investing.
German retail sales this morning were much better than expected; conversely, although French consumer spending was disappointing. All eyes are on Eurozone inflation, set to be released this morning.
The dollar took early gains from the pound early on, although it managed to make some back in the afternoon. It ended the day pretty much level against both the pound and the Euro.
Data from the US was yesterday was mixed. Durable goods orders fell less in January than previously thought, only dropping 1% as opposed to 1.5%. However, a contraction is still a contraction, and this data shouldn’t be viewed as a complete positive. Initial Jobless Claims increased by 348K in the week ending the 21st of Jan, although continuing jobless claims were 21K less than estimated, at 2.964 million.
In Janet Yellen’s debut in front of the Senate banking committee, the Fed Chair made probably the biggest admission yet that recent US data had been ‘soft’. However, those that are calling for a reduction in tapering will have to wait a bit longer, as Ms Yellen promised to gain a much deeper understanding of the causes of the poor data before considering any definitive moves.
Data from the data US today includes the latest GDP figures. The exact reading is contentious, with anywhere from 2.5 – 2.7% being called. We also have consumption expenditures, Home Sales and the Chicago PMI numbers.