Morning Report: 22 December 2015

22nd December 2015 By: Ranko Berich

GBP Sterling was flat against USD yesterday, but did weaken to the euro slightly. The Confederation of British Industry reported its Realized Sales index, which showed sales volumes across the surveyed stores increasing rapidly over the run-up to Christmas. Today at 09:30 GMT, Public Sector Net Borrowing data will be released.

EUR The euro saw a fairly significant move yesterday morning, strengthening against USD and GBP, but has been somewhat flat since then. Some data of secondary importance was released, including the German Producer Price Index which contracted 0.2% in November, marking four straight months of contraction and a cumulative 1.5% drop in prices. The implications of this are fairly grim for consumer prices, which obviously take a cue from the prices manufacturers are able to charge, and point towards a troubled 2016 for the European Central Bank. Consumer Confidence figures for November showed an unchanged level of overall pessimism among the surveyed consumers.

USD Hesitance continues to creep into US dollar trading this morning, with the greenback weakening to the entire G10 overnight, led by an impressive Kiwi dollar. This afternoon’s data offers a chance for a turnaround, with the final release of Gross Domestic Product Growth in the third quarter due for release at 13:30 GMT, accompanied by the GDP Price Index. Later in the afternoon, Existing Home Sales will be released alongside the Richmond Manufacturing Index at 15:00.

CAD Brent crude fell to a fresh 11 year low yesterday, but although the Canadian dollar did weaken and erase the meagre gains it had made in the morning, the loonie did not fall below the lows seen on Friday against the US dollar. No data will be released today, meaning attention will remain firmly fixed on further developments in crude oil markets.

UK news

  • Reuters. Osborne’s budget challenge deepens as public finances worsen in November: British public finances unexpectedly worsened in November, adding to the already tough challenge for finance minister George Osborne to meet this year’s target for cutting the country’s budget deficit.
  • Reuters. UK consumers a bit more confident in December, wary about 2016: British consumer morale in December edged up from a six-month low in November, but households remain more worried about the economy than they were at the end of last year, a survey showed on Tuesday.