Morning Report: 30 December 2014

30th December 2014 By: Admin

GBP No real movement on sterling yesterday, with a house price report from Nationwide this morning having only a mildly negative effect on GBP, coming in at 0.2% monthly growth, rather than the 0.3% forecast. No further data is due out today which means that we may well see another quiet day of trading.

EUR The euro was the markets major focus yesterday, with Greece’s failure to elect its nominated Presidential candidate triggering snap elections in the country, causing the euro to sink to fresh multi-year lows. Investors are now braced for yet more economic upheaval in the troubled state, as public anger against austerity measures continues to grow, reviving the spectre of a fresh Greek default and potential “Grexit” from the Eurozone. European Union officials scrambled to re-iterate to the Greek public the importance of sticking to its agreed austerity measures through a series of announcements yesterday, but whether the electorate heed their warnings at the January 25 polls remains to be seen. Aside from this, markets are bracing themselves for the addition of Lithuania to the Eurozone economic bloc, a move set to take place on January 1st, in place of the outgoing Lithuanian litas. The move towards the West, and away from Russia, is politically popular in the Baltic state, particularly in light of recent Russian intervention in Ukraine. However, economically, there is a sense of apprehension, as the small nation eyes with trepidation the impending woes for the Eurozone as a whole over the coming year.

USD No news from the US yesterday meant that the only gains for the greenback came against the troubled euro. Consumer Confidence figures this afternoon, however, which are forecast to rise to their highest levels since 2007, should create at least some interest in the dollar this afternoon.

CAD The Canadian dollar was completely asleep yesterday, moving only a fraction of a percent despite low liquidity in the markets. With no new data out today, unless something dramatic occurs in the commodity or oil markets, today is likely to be another sleepy day for the loonie.

UK news

  • FT. UK wage growth to remain weak, says CIPD report: UK wage growth is likely to remain weak for at least another year because employers are finding it easy to recruit and retain staff at current pay levels, according to the organisation that represents HR managers.
  • Reuters. UK house price inflation slows to 13-month low – Nationwide: British annual house prices rose at the slowest annual rate in more than a year this month as the property market continued to lose momentum across the country, figures from mortgage lender Nationwide showed on Tuesday.
  • Daily Mail. Call for interest rates to stay frozen for the whole of 2015 – but majority of former MPC members want a rise by June: Interest rates should be kept on hold throughout the whole of next year, says a leading think tank, with the Bank of England urged to ‘freeze not squeeze’.
  • Daily Mail. One in five expect their finances to worsen in 2015 as household debt soars and interest rate rises loom: Twice as many people fear their finances will worsen next year as those who believe they will improve, new research from the Money Advice Service suggests today.