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Market News – 09 January 2017

President-elect Donald Trump has conceded that Russia conducted cyber-attacks during the US election. However, he stated that only ‘stupid people’ would question closer relations with Russia. Trumps special adviser also confirmed that he will not be punishing Moscow for the attacks.

GBP

Prime minister Theresa May has indicated that Britain will leave the EU single market, adding that she’s not interested in trying to “keep bits of membership.” Speaking to Sky News, she said she wanted to get a bespoke deal with the rest of Europe, to get better control of immigration.

The Prime Minister went on to say that she will be outlining her Brexit strategy in the weeks ahead, denying suggestions from Sir Ivan Rogers that her Brexit plan is in disarray. Sterling is down almost 0.8 percent against the Dollar and Euro this morning following the comments.

The final quarter of 2016 saw the strongest growth in consumer spending in two years, according to Visa. Its research, which reflects cash and card spending, showed expenditure rising at an annual rate of 2.8% – the quickest growth rate since 2014.

Co-Head of Global Macro and Markets Research at Goldman Sachs, Francesco Garzarelli, sees 1.14 against the dollar by year end, a substantial weakening from the current level.

EUR

Germany’s current account surplus for November totalled €24.6 billion, compared to €19.4 billion in October. The country’s seasonally adjusted trade surplus came to €21.7 billion versus €20.6 billion in October.

Industrial output was 0.4 percent month-on-month in November, against 0.5 percent in October.

The December PMI survey for the Eurozone, which takes in manufacturing, services and construction, came in at 54.4 – an increase from 53.9 in November and was the strongest showing since May 2011. Encouragingly, the growth was broadly spread, with Spain the star performer.

USD

President-elect Donald trump will take centre stage Wednesday, with his first post-election news conference. Eyes will be on further details of promises made in his election campaign.

US businesses added 156,000 jobs in December in the last release of key economic data before Donald Trump is sworn in as US president. The number of jobs created fell from an upwardly revised 204,000 in November and came in below market expectations of 175,000. Average hourly earnings jumped to a six-year high of 2.9%.

Rest of the World

China’s Renminbi made its biggest-ever two day gain last week, buoyed by strong data and low liquidity offshore, with gains as high as 2.6%.

The Turkish Lira hit a record low against the Dollar last week. After losing 17% against the Dollar in 2016, the rout has continued in early 2017. Turkey remains in a state of emergency following terrorist attacks and an attempted coup against President Erdogan.

Top Tier Data this week –

Tuesday: CHF Unemployment rate (Mom)

Wednesday: UK GDP Estimate (3M Dec)

Thursday: ECB MPC Accounts

Friday: US Retail Sales (MoM)