Morning Report: 23 December 2014
23rd December 2014 By: Admin
GBP A quiet day for the UK yesterday, with the only fresh release being the minutes of the Financial Policy Committee meeting. The FPC falls under the remit of the Bank of England, and is tasked with providing insights into the financial stability and strength of the UK economy. The major headline emanating from yesterday’s release was that confidence in the banking system is perceived to be shaky, after a spate of cyber-attacks and software failures within major financial institutions, such as the state-owned Royal Bank of Scotland. Nonetheless, the report failed to mention anything seminal relating to the wider health of the UK economy, and as a result sterling remained unchanged. This morning, at 9.30am GMT, we see the release of the latest Current Account figures for the UK, which is expected to show a net deficit of £21.1bn of the value of imports in to the UK over the value of our exports.
USD The US dollar remains well supported, despite a disappointing Existing Home Sales report yesterday afternoon. The report measures the number of residential buildings that had been sold the previous month, but after exceeding expectations for five out of the previous six months, and off the back of a one-year high reading of 5.26m last month, the number dropped fairly sharply to 4.93m. With demand falling in all regions of the country, the figures raise the spectre of an uneven economic recovery in the US, which would dampen the Federal Reserve’s enthusiasm for any early-year rate hikes. Despite this, most market participants seem to have shrugged off the significance of the news, given that housing sales tend to slow down in the winter months anyway, and so the greenback remains on the front foot in early morning trading. Final Q3 Gross Domestic Product figures for the US economy are released at 1.30pm GMT today, which will inevitably prove a mover if it departs from the 4.3% previous reading.
EUR Nothing to report on the euro yesterday, except to note that despite the recovery in the Russian rouble over the past seems to have had little effect in boosting confidence in the Eurozone. Europe is perceived as particularly vulnerable to the woes of the Russian economy, not only because of how directly dependent it is on Russian energy supply, but also because as an economic bloc it is responsible for over ten times the amount of trade with the pariah nation than, for example, the US. French consumer spending data this morning beat expectations, at 0.4% against a 0.2% forecast, but aside from that there is likely going to be little to report for the single currency today, either.
CAD The Canadian dollar has managed to stave off any fresh multi-year highs against the US dollar, though this may well change this afternoon. Monthly Gross Domestic Product figures are set for release from Canada at 1.30pm GMT, the same time as the US reports the final reading of their quarterly figure, and the number is expected to drop from 0.4% last month, to a meagre 0.1% for the last month. The performance of the Canadian economy has been patchy at best over recent months, and so the figure will be closely analysed.
- FT. Britons shift spending towards luxuries: Low inflation and the supermarket price war have allowed cash-strapped Britons to redirect more of their spending towards luxuries, according to an analysis of spending data.
- Telegraph. Job rich recovery to unlock broadest pay growth since 2006, says CBI: Confederation of British Industry says bigger rises in permanent work will pave way for stronger pay growth.
- Telegraph. Financial services employee numbers at highest level since crisis hit: Research by TheCityUK finds that 2.1m people now work in finance and related professional services – the highest level since 2008.