|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(Please note these rates were taken at 11:00am GMT, rates do fluctuate every 2 – 3 seconds)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
If you need any other exchange rates then please don’t hesitate to contact me.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The UK economy contracted at a 0.2% quarterly rate in the fourth quarter, according to the latest data out this morning from the Office for National Statistics. Consensus estimates were looking for a fall of 0.1%. “While these figures reveal significant weakness in the economy, we do not think they mark the start of an inexorable slide into a severe recession,” said Barclays Capital analyst Blerina Uruci. the decision taken by the members of the Bank of England’s (BoE) Monetary Policy Committee to maintain the current policy settings at the last meeting was a unanimous one, the central bank revealed today; while gross mortgage lending totalled £9bn in December, the strongest month of 2011 and 12% higher than the December 2010, according to the British Bankers’ Association (BBA), as mortgage approvals rose more than expected. Todays CBI distributive trade survey data ought to reflect the impact of constrained household spending on high street sales for the first month of this year. The survey is anticipated to show that the balance of retailers believe that sales volumes in January were lower than levels experienced over the same period last year.
In Eurozone news, the International Monetary Fund (IMF) is putting the pressure on the European Central Bank (ECB) to also take a haircut on its own €40bn worth of Greek bond holdings, according to the Financial Times. The ECB bought up these sovereign bonds below par value as part of the programme to save Greece from collapse back in 2010 and has also accepted them as collateral as a means of propping up the country’s banks. According to the paper, these bonds currently carry a yield in excess of 7% and the pressure is on the European monetary authority to forgo profits in order to ease Greece’s debt loads. The German Treasury defined its latest debt auction held this morning as “impressive” after yields fell to a record low for 30-year securities. The German Treasury sold €2.46bn in 30-year debt on bids for more than €5bn. The average yield offered from this security fell to 2.62%, down from 2.82% the previous auction. Meanwhile, Germany’s business climate indicator for January beat expectations to register a reading of 108.3 points compared to 107.3 in December, according to the German IFO Institute located in Munich. The Ifo expectations increased again and current condition was close to unchanged. It appears that the forward-looking Ifo index bottomed out in October. Danske expect Ifo expectations to increase moderately and to stay in line with very moderate positive growth in Q1. Danske’s Ifo expectations model also points to further increases. yesterday’s release added upside risk to the estimate of zero growth q/q in Q1 in Germany. Danske forecast German growth in 2012 of 0.8% and 1.9% in 2013.
USD weakened on the back of the dovish FOMC announcement, suffering both due to the correction lower in US rates and the overall pick-up in risk appetite. This led EUR/USD to break above 1.31 The Fed surprised the market by announcing that rates are expected to be exceptionally low at least through late 2014 – almost three years from now! This was one year later than Danske expected. However, exceptionally low does not necessarily mean unchanged rates, as 11 out of 18 members see the rate higher than the current rate in late 2014. This was a bit of a surprise. There is a wide dispersion between Fed members’ estimates of the first hike with three members wanting a rate hike already in 2012 while two members want to wait until 2016. The Fed also announced a new explicit longer-run goal on inflation at 2%. This is slightly higher than the previous longer-run projection of inflation at 1.75%-2% that was part of the economic projections, but not stated as explicit goal. Despite the recent improvement in the economy the Fed is still very cautious on the outlook in the statement. The Fed sees modest growth in the coming quarters and still significant downside risks to the outlook. The Fed also gave the inflation outlook a dovish twist by removing the sentence that it will pay close attention to inflation and inflation expectations. The more dovish statement may be due to a change in voting rights with three hawks no longer being voters and only replaced by one hawk, Jeffrey Lacker, who dissented. The projections reveal a more hawkish tilt among non-voters. Based on the new FOMC projections, Danske now look for the first rate hike in mid-2014 (instead of late 2013). Weaker than expected US pending home sales data for December released yesterday, which fell by 3.5% on the month, should not detract from an overall improvement in housing market volumes. Lloyds TSB forecast new home sales released this afternoon to rise by 10k to a saar of 325k from November’s levels. The US housing market has been a key laggard relative to the wider improving US economy. Growth in durable goods orders in the US for the month of December is likely to have moderated to 1.7% from 3.7% in November. November’s data was boosted by a series of Boeing aircraft orders placed during the month. Initial jobless claims for the week ending 21/1 are estimated to rise by 13k from the previous week. However, much of the market’s attention will be focused on tomorrow’s release of the first estimate of US Q4 GDP.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The author(s) cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LinkedIn – http://uk.linkedin.com/in/currencybroker
Facebook – http://www.facebook.com/currencybroker
Twitter – http://twitter.com/currency_broker
Ashley Ingle website – corporate and personal currency broker
Like this:
One blogger likes this post.
