The Week Ahead

Last week the pound was in a fairly sideways trend as the main driving force for the markets continued to come from updates of the US and Iran conflict.

Over in the States we saw President Trump’s first rally of the election year held in Toledo, Ohio. Reporters on the ground stated that Republicans were out in numbers to support the President in preparation for his 2020 campaign.

On Friday we saw the release of the Non-Farm Payroll data, it showed that in December there were 145k new jobs created in the US compared to the previous 256k. This drop in jobs did weaken the dollar slightly. Robert Kaplan of the Federal Reserve commented that he sees 2-2.25% GDP growth throughout 2020 and doesn’t expect any changes to be made to the US interest rates.

Sterling shed more than half a percent in early trading this morning after another Bank of England policymaker said at the weekend, he would vote for an interest rate cut later this month unless economic data improved significantly.

Policymaker Gertjan Vlieghe’s comments on Sunday were the latest sign that the BoE is concerned about weakness in the British economy and the need to act soon.

Moving on to the economic data front for the week these are some of the data releases to keep an eye on;

Monday 13th January

UK Industrial Production is expected to remain unchanged at -1.3%.

UK Manufacturing Production is forecasted to drop further to -1.6% from -1.2%.

Tuesday 14th January

US Consumer Price Index (Inflation) is expected to increase by 0.3% to 2.4%.

Wednesday 15th January

German GDP is expected to decrease from 1.5% to 0.6%.

UK Consumer Price Index (Inflation) is expected to stay on par at 1.5%.

Thursday 16th January

German Consumer Price Index (Inflation) is forecasted to remain unchanged at 1.5%.

Friday 17th January

UK Retail Sales, excluding Auto Fuel, is expected to increase from 0.8% to 3%.

Eurozone Consumer Price Index (Inflation) is expected up at 1.3% from the previous 1%.

Throughout 2020 we are expecting economic data to take more control of the FX markets as political issues such as Brexit become resolved they should move into the spotlight.

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