Macro events & news for January 14, 2016

14 January, 2016

Macro events & news for January 14, 2016

FX News Today

German GDP growth accelerated to 1.7% in 2015, from 1.6% in 2014 and in line with expectations. On a working day adjusted basis though, growth slowed to 1.5% from 1.6%, so despite the improvement in the headline number the German economy didn’t quite escape the slowdown in world growth, but both numbers are clear above the long term average of 1.3%. The German statistical office said that growth was relatively broad based across the manufacturing and construction as well as the services sectors. Overall then a solid number, although even in Germany structural issues remain and this year the refugee influx will put a strain on the economy.

ECB lowers Greek ELA ceiling to EUR 72 blnfrom EUR 75.8 bln. The Greek central bank said in a statement that the ECB did not object to lowering the ceiling by EUR 3.8 bln, which reflects an improvement of the liquidity situation of Greek banks amid a reduction of uncertainty and the stabilisation of private sector deposit flows, as well as the progress achieved in the recapitalisation process of Greek banks”.

Fed Beige Book: “mostly positive” was the outlook on future economic growth in the District reports for the January 26-27 FOMC meeting, seeming to supplant the “modest to moderate” mantra that had been in place for more than a year. Labor markets were seen to have tightened further, in four districts along with “flat to moderate” wage pressures, half reporting higher wage pressures for more skilled workers and those positions in short supply. Manufacturing remained weakened, with the declines in commodities/oil, the stronger dollar, and slipping global demand remaining headwinds for most districts (energy sector hurt in particular). Consumer spending was moderate, though credit conditions generally improved, along with growth in loan demand. The Book was prepared by the Philly Fed with data collected before January 4, which wouldn’t include the December payrolls print.

Chicago Fed dove Evans said he pays attention to international developments and how they impact the U.S. economy, noting he will monitor the effects of the decline in China’s growth. We thought he might take this global path on the economic outlook and monetary policy, given his dovish credentials. In addition, he says that the Fed is about as transparent as it can be.

Main Macro Events Today

Bank of England interest rate decision: The BoE policy announcement is widely expected to see the bank leave policy unchanged. We expect the vote also to remain unchanged from last month, with 8-1 in favour of leaving the repo rate at its historic low of 0.5%. Come March, it’ll be seven years that the rate has been at this level and we don’t expect a tightening until later in the year. Last week’s December PMI survey data were sympathetic to the view that the BoE is likely to tighten policy later and it will be interesting to see in the minutes in how far the most recent bout of risk aversion and the slump in oil prices have rattled policy makers.
ECB Monetary Policy Meeting Accounts: markets wait for Draghi’s views on economic and monetary developments.
US Jobless Claims: initial jobless claims are expected to be 272k (median 270k) in the week-ended January 9. Continuing claims are expected to fall to 2,200k for the week-ended January 2. Forecast risk: downward, as layoffs from holiday hiring could boost claims. Market risk: downward, as weaker than expected data could slow the path of rate hikes.


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US reports revealed modest upside surprises for December trade

Asian stock markets mostly moved higher overnight, with Nikkei and Topix was trading close to levels last seen in December 2015 as the Yen weakened...

The global stock rally continued in Asia overnight

Reuters reported, the fast-growing financial technology (Fintech) sector could hold big “systemic risks” for the banking sector and the broader economy which need to be addressed by bank regulators around the world, Bank of England Governor Mark Carney said on Wednesday...

Too-strong a dollar may hurt the economy

Japanese stock markets moved higher, led by Japanese bourses as the country managed to snap a 14-month long run of falling exports, which helped the Nikkei to close with a 1.4% gain...


Dollar found its feet after declining over the last day

Asian stock markets were mixed overnight, with Japanese bourses still under pressure (Nikkei closed down 0.55%). despite a dip in the Yen, as USD stabilised. Uncertainty over Trump’s regulatory and trade policies continues to weigh on investor sentiment...

The dollar has settled moderately lower

Asian stock markets were mixed overnight, after U.S. and European shares closed in the red Thursday. Japan and mainland China bourses managed to move higher (Chinese GDP beat expectations at 6.8%)...

Stock markets continued to stabilise

German HICP confirmed at 1.7% y/y, as expected, with prices up 1.0% m/m. The sharp acceleration from just 0.7% y/y in November was mainly due to base effects from lower energy prices and the breakdown showed that prices for heating oil jumped 21.9% y/y in December...


ECB policy was focused on avoiding deflation trap

Asian stock markets were mixed, with Japan and ASX heading south amid reports that U.K. Prime Minister May will announce plans for a hard Brexit at today’s keynote speech. Yen strength is also continuing to put pressure on the Japanese markets...

U.S. markets are closed Monday

U.S. markets are closed Monday for Martin Luther King Day. This will be a busy week for traders, with the inauguration of president-elect Trump on Friday headlining...

The dollar is trading softer into the London open

Aftershocks from President-elect Trump’s campaign-like press conference, which had weighed on global stock markets and yields started to recede late in the U.S. session and U.S. equities managed to recover part of their losses...

  


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