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Today, the UK publishes one of its most scrutinised piece of data before the Christmas closure, the Consumer Price Index. With expectations of a rise to 1.1%, the pound could see gains this morning, although the US interest rate rise expected tomorrow may claw back Tuesdays gains & cause market volatility. The long term plan for the Bank of England is to get Inflation to its 2% target, and a strong reading from the CPI numbers would go a long way to boost their inflation goals.
Private sector jobs in the UK has given Sterling a lift, as an 8% increase in figures is expected for the next quarter. Also, the financial sector has seemingly discarded Brexit, as it looks to hire more people in the New Year, leading to a surprising employment growth and openings of new work opportunities.
Fragility lingers over the euro
Eurozone ZEW Survey & German Wholesale Price Index are out today for investor digestion; however, Mario Draghi’s reshuffle of the Quantitative Easing is expected to keep the euro fragile. Although he cut the amount of bond purchases from €80bn to €60bn, the extension of time, decided in an attempt to continue to boost the EU economy, has left some people unconvinced.
OPEC and oil producing countries struck a deal
Brent Crude continued its superb gains yesterday, touching $57 a barrel. A deal looks to have been struck between the OPEC and other oil producing countries, giving the cost of a barrel a 5% increase. There will be a reduction in producing the black substance by just over 550K barrels per day as the powerhouses got together and decided there is an oversupply which doesn’t meet demand.
Tomorrow’s focus will be on Janet Yellen
All eyes will be on Janet Yellen tomorrow as she looks to raise interest rates almost a year on from doing so in 2015. With almost 100% probability of a rate rise, the investors will be interested to see whether this has already been priced into the FX markets, but volatility is still expected once Janet Yellen’s speech gets under way.
