Morning Report: 09 January 2015

9th January 2015 By: Admin

GBP The pound has opened its account for 2015 on the back foot and has now fallen for each of the first four trading days of the New Year so far and currently sits at its lowest levels since June 2013. Halifax House Price Index showed that annual price growth eased further down to 7.8% in December. The moderation in the house price growth has come as a relief to the UK central bank, concerned in 2014 about the risk of an overheating property market should force them to tighten economic policy faster than expected. As the housing market appears to be cooling off, it has reduced the chances of a rate hike in the UK – the Bank of England yesterday left its rates on hold at 0.5%. Today, Manufacturing Production figures are set for release at 9.30am GMT.

EUR German industrial production unexpectedly fell for the first time in 3 months this morning, as energy output slumped signalling the recovery in Europe’s largest economy remains vulnerable. Output, adjusted for seasonal swings, fell 0.1% from October, when it climbed a revised 0.6%. The Bundesbank has said the German economy managed only a “modest” start to the fourth quarter after effectively stagnating in the previous six months. While surveys have shown that economic sentiment in the country is improving, the outlook is clouded by the euro area’s struggle with sluggish growth, falling prices and Greek political instability.

USD Today presents Non-Farm Payrolls which are expected to show a continuing improvement in the jobs market. The report is expected to show 240K jobs created in December – the big question is whether the strength in November carried into December. Stocks on Wall Street rose 1.8% yesterday giving the US its first back to back rise of the year despite tumbling oil prices. The Fed remains optimistic of an aggressive new stimulus package this month from the European Central Bank prompted by Wednesdays data showing Eurozone prices saw their first fall since the height of the financial crisis.

CAD Second-tier housing data disappointed market expectations, ensuring that the Canadian dollar’s brief fightback against its US counterpart was indeed shortlived. We do have a raft of data out this afternoon though, with employment numbers, further housing data, and construction figures all set for release at around 1.30pm GMT, so we should see a pick-up in activity on CAD today.

UK news

  • FT. Bank of England keeps interest rates and policy on hold: The first UK interest rate rise in more than five years remains a distant prospect, as the Bank of England voted to keep monetary policy on hold for another month.
  • Reuters. UK firms step up hiring of permanent staff in December – REC: British firms hired permanent staff through recruitment companies at a faster rate in December although growth in starting salaries eased slightly, an industry survey showed on Friday.
  • Reuters. UK businesses enjoy strong end to 2014, confident about prospects – BCC: British businesses enjoyed a strong end to 2014, marked by rising demand at home and abroad and a record number of companies hiring staff, a major business survey showed on Thursday.
  • Independent. Bank of England heading for new inflation target: The Bank of England is likely to be asked to target a new inflation measure after an independent review commissioned by the UK Statistics Authority recommended scrapping the Consumer Prices Index (CPI) as the headline measure of price increases.
  • Daily Mail. Average house price went up by 7.8% in 2014 and rate of increase will be half that in 2015, says Halifax: The average house price in the UK went up by 7.8 percent in 2014 but that figure will be halved this year, according to the latest property survey.