Market News – 8 January 2018


Sterling saw a modest strengthening on balance last week.

Brexit developments were few and far between although there were reports that the UK government were looking at joining the Trans-Pacific Partnership. Trade Minister Liam Fox later said such discussions would be premature.

Losses were seen on Wednesday after a weak construction PMI print (52.2 vs. 52.5) but gains followed on Thursday after a trifecta of stronger macro releases in service PMI, mortgage approvals and Nationwide house prices.

For the week, Sterling gained 0.4% versus the US Dollar, 0.1% versus the Euro and 0.9% versus the Yen.


A mixed week for the Euro with the single currency faring better against the riskier of the G10 currencies.

Macro impulses failed to prompt much reaction, including the pan Euro Zone CPI print on Friday with headline inflation in line at +1.4% and the core rate a touch softer at +0.9%.

At the ECB, Ewald Nowotny said the end of the asset purchases was in sight while Smets suggested the program could run beyond September.


The US Dollar was mixed last week with the Dollar Index closing flat versus the prior Friday’s close.

Volatility was seen on Friday following the US jobs report with the Greenback falling initially on the non-farm payrolls miss (148,000 vs. 190,000) before bouncing back. We also saw a brief drop after some dovish remarks from Philadelphia Fed President Harker who said he sees two rate hikes this year as opposed to three.

Earlier in the week, we saw a modest strengthening after the FOMC minutes were released and revealed that a few members believe the median forecast for three rate increases this year is too conservative.


The Japanese Yen was among the weakest of the G10 currencies last week. Safe-haven assets struggled across the board as US equity markets climbed to fresh record levels and the Nikkei reaching its best level in over twenty-five years.

Signs of reduced tension in the Korean peninsula will also have provided a weight after North Korea seemingly offered an olive branch to the South.

Domestically, Japanese manufacturing PMI dropped to 54.0 from 54.2.


The Australian Dollar strengthened for the most part last week.

Macro data provided some mixed impulses with Chinese manufacturing PMI surprising to the upside at the start of the week and Australian trade figures falling short of expectations on Friday where we saw a surprise deficit.

Oil prices will have provided support meanwhile with US crude futures adding +1.4% for the week and hitting their highest level since July 2015 on Thursday.


The Canadian Dollar strengthened last week, making the bulk of its gains on Friday after a stellar employment report.

The Canadian economy added 76,800 jobs in December, way above the market consensus for +1.0K while the unemployment rate dropped to 5.7% from 5.9%.

Earlier in the week, RBC manufacturing PMI improved to 54.7 from 54.4.


The New Zealand Dollar strengthened last week although there was little domestic news to note.

Stronger than expected Chinese PMI data will have provided support, as would the multi-year high in crude prices.


The Swedish Krona strengthened last week along with most of the perceived risker G10 currencies.

Domestic news was light meanwhile with a stronger service PMI print countered by a weaker manufacturing reading.


The Norwegian Krone was one of the strongest G10 currencies last week.

The Krone received an additional boost from further gains on oil prices with US crude futures hitting their best level since July 2015 and adding 1.4% for the week.

Domestically, the unemployment rate held steady at 4.0%.