Articles from January 2017



Donald Trump’s travel ban leads to investor concerns

Donald Trump’s travel ban has led to investors moving into other safe havens, with JPY and Gold being the short term winners.

Donald Trump's travel ban has led to investors moving into other safe havens, with JPY and Gold being the short term winners.

Business leaders from across the world have voiced their opinions and now Theresa May has come into the firing line for not overly condemning his latest actions. She has since stated she looks forward to welcoming the new President of the US, which has seen a petition to ban him reaching 1.5 million signatures. Seven Muslim majority countries have been banned from entering the US for a short term period, but similar countries who have had dealings with Trumpís own businesses appear to be have been green lighted to travel freely.

Lobby group sees Brexit as golden opportunity to boost trade

City UK Lobby Group has stated it sees Brexit as a golden opportunity to boost trade and investment in the coming years, having previously voted and campaigned to remain in the EU. Such positivity will no doubt back the UK Prime Ministers corner, as she seeks to get clarity from the Supreme Court soon.

German inflation almost touches 2%

Yesterday, German inflation almost touched 2%, the key indicator level which ECB yearns for. This could put more pressure on Mario Draghi to think about tightening the current Monetary Policy. Germanyís economists are keen for the ECB to cut the QE programme soon, but other countries are still undecided.

Big day in terms of key note speakers

Big day in terms of key note speakers and particularly data, with the Bank of Japan stating its Monetary Policy Statement in the early hours of Asian trading. The German unemployment rate is being seen as the main piece of data today with forecasts expected to remain at 6% whilst Eurozone Consumer Price Index and Gross Domestic Product are also out today. The UK has its Mortgage Approvals numbers for viewing alongside Net Consumer Credit. Canadian Gross Domestic Product and US Consumer Confidence finish a busy day for the FX markets.

Theresa May and Donald Trump hold face to face talks today

The White House readies itself to welcome UK Prime Minister Theresa May today.

The White House readies itself to welcome UK Prime Minister Theresa May today.

She is the first leader to meet the new US president, and there is already a lot of anticipation and contrasting views in the media on the meeting. Mrs May is ambitious, and wants to try and secure a free trade deal with the US, post-Brexit. This is a very early meeting where nothing will be set in stone, but it will be nonetheless interesting to hear from the two leaders.

Wise Money market news

Over to the markets, yesterday we learnt that in the UK, strong consumer spending has supported growth over the past three months and this has helped the UK to grow at the end of 2016, beating the dampening impact of the Brexit vote.

The services sector continues to be the driving force behind the UK economy in recent quarters, but many analysts are still worried that 2017 will be a more testing year for the UK economy as consumer spending is likely to be squeezed by rising inflation. Nonetheless, the data yesterday was very encouraging, as the UK was again the fastest growing G7 economy in 2016, with GDP growing by 0.6% quarter on quarter in the final three months of the year.

Over in Germany, the GFK consumer confidence reading for February improved more than expected, printing 10.2 against an expected 10.

In the US the day was busy, with flash PMIs for January beating expectations and improving month on month to 55.1 against an expected 54.4. Labour market data was slightly disappointing, with initial jobless claims rising more than expected to 259k. New home sales for December also disappointed at 536k, against a market expectation of 588k.

Data to come

Looking at todayís calendar we start in Europe, with December M3 money supply numbers and January consumer confidence out in France.

In the US, Q4 GDP are scheduled for release, together with preliminary data on durable and capital goods orders in December. The last piece of data will be the final University of Michigan sentiment reading for January. All in all it will be a fairly busy end to the week with Trump-May meeting providing the backdrop to it.

Trump and May push for boost to domestic production

Most of Wise Money’s focus was the lead up to Donald Trump’s inauguration, and Theresa May and Donald Trump hold face-to-face talks today.

Most of Wise Money's focus was the lead up to Donald Trump's inauguration, and Theresa May and Donald Trump hold face-to-face talks today

By Davide Ugolini, Senior Corporate Dealer

The White House readies itself to welcome UK Prime Minister Theresa May today. She is the first leader to meet the new US president, and there is already a lot of anticipation and contrasting views in the media on the meeting. Mrs May is ambitious, and wants to try and secure a free trade deal with the US, post-Brexit. This is a very early meeting where nothing will be set in stone, but it will be nonetheless interesting to hear from the two leaders.

Market news

Over to the markets, yesterday we learnt that in the UK, strong consumer spending has supported growth over the past three months and this has helped the UK to grow at the end of 2016, beating the dampening impact of the Brexit vote.

The services sector continues to be the driving force behind the UK economy in recent quarters, but many analysts are still worried that 2017 will be a more testing year for the UK economy as consumer spending is likely to be squeezed by rising inflation. Nonetheless, the data yesterday was very encouraging, as the UK was again the fastest growing G7 economy in 2016, with GDP growing by 0.6% quarter on quarter in the final three months of the year.

Over in Germany, the GFK consumer confidence reading for February improved more than expected, printing 10.2 against an expected 10.

In the US the day was busy, with flash PMIs for January beating expectations and improving month on month to 55.1 against an expected 54.4. Labour market data was slightly disappointing, with initial jobless claims rising more than expected to 259k. New home sales for December also disappointed at 536k, against a market expectation of 588k.

Data to come

Looking at todayís calendar we start in Europe, with December M3 money supply numbers and January consumer confidence out in France.

In the US, Q4 GDP are scheduled for release, together with preliminary data on durable and capital goods orders in December. The last piece of data will be the final University of Michigan sentiment reading for January. All in all it will be a fairly busy end to the week with Trump-May meeting providing the backdrop to it.the Greenback lost a bit of strength as risk appetite soured across the board.

With the Federal Reserve announcing that the US is close to full employment, they may be looking ahead to unwind the Fed balance sheet and increase interest rates, although Fed Chair Janet Yellen insists that this has to be a very ‘gradual’ procedure which puts the Fed back into dovish mode. The overnight slump in the US Dollar mainly happened due to the lack of fiscal policy clarity as promised by Donald Trump. Most of the trading today will be subdued in the absence of any economic data from the US. For the euro, ECB President Mario Draghi is speaking later today and as per his dovish stance in his speech last week that the Eurozone is meandering on towards growth, he did manage to reiterate that inflation expectations have been edging higher in the Eurozone due to rising bond yields and the uptick in oil prices. With a barren economic calendar on the cards, most of the movement for the EURUSD pair will come from statements made by Mario Draghi in his speech today.

Sterling overlooks Friday’s weak retail sales

Sterling has overlooked Friday’s weak retail sales numbers and moved up against all its major counterparts mainly owing to weakness in the Greenback. Meanwhile, Prime Minister Theresa May will offer to deal with UK business ‘sector-wise’ including a push towards an industrial strategy to retain manufacturing in the UK to promote future growth as they make their way out of the EU and the Single Market. With no economic data out today from the UK, focus will continue to be on updates emanating from Brexit developments.

Brexit piles pressure on Sterling despite positive data

Having started the week on the back foot, the pound has recovered marginally against its counterparts.

Having started the week on the back foot, the pound has recovered marginally against its counterparts.

Over the weekend, Theresa May suggested that the UK might leave the single market if there was no compromise on the free movement of people. The comments have been interpreted by foreign exchange markets as pointing towards a ëhard Brexití, which pushed Sterling lower across the board at the start of the week.

The Prime Minister was quick to lay blame on the media for misconstruing her remarks and Sterling has managed to recover slightly amidst positive data from the economy. Forecasts show that inflation is on an upward trajectory for 2017 and the FTSE is trading at record highs.

Carney wary of Brexit dangers

Governor of the Bank of England, Mark Carney, spoke yesterday in front of the Treasury Select Committee. His speech warned Brussels that the lack of a transition deal on Brexit negotiations will hurt the EU more than it will the UK. However, the sense of subdued optimism was quickly squashed as he also warned that Brexit could ìamplifyî four other dangers to the UK economy including the current account deficit, further weakness in Sterling, mounting consumer credit and a weaker commercial property market. With no economic data out of the UK today, markets will continue trading on news around Brexit.

Strengthening of the US dollar

Meanwhile, across the pond in the US, markets were keenly focussed on President elect Donald Trumpís press conference. His speech was mostly centred around healthcare and intelligence issues, and the only mention of note for financial markets was a hint at a proposed border tax on companies leaving the UK.

The Greenback continues to gain value as the Federal Reserve are forecasted to increase interest rates three times in 2017. Inflation is also predicted to pick up and give the economy a much-needed boost.

Wise Money markets await Fed speeches

The blip in US employment numbers released on Friday seems to have been overlooked by the markets as they now focus their attentions on further economic data. They include jobless claims, consumer confidence data and most notably, speeches by Fed Members Lockhart, Bullard, Harker and Kaplan. Meanwhile, from the Eurozone, we are expecting minutes from the European Central Bank meeting held in December.

Wise Money markets continue to interpret Mayís speech

It was another steady day for Sterling, as the wise money markets continued to interpret Theresa Mayís speech from Tuesday.

It was another steady day for Sterling, as the wise money markets continued to interpret Theresa Mayís speech from Tuesday.

The Prime Minister gave the currency a much needed boost, stating that unless the UK and EU were able to negotiate a civil divorce package, then Britain would go it alone and leave the single market.

Sterling has gone from strength to strength after Mayís speech, in what could be a sign of what ís to come in 2017, especially as the Eurozone has a big year of uncertainty, with upcoming elections in France, Germany and the Netherlands.

US dollar halts decline

The US dollar managed to halt its decline and regained some ground yesterday, especially late in the session, when it accelerated higher following some upbeat comments from Janet Yellen.

Yellen said that with the US at near full employment, and inflation approaching the required targets, we can expect further rate hikes in the coming months, but timing depends on the economy. She continued, stating that she expects more than one hike this year, giving the dollar a further boost.

Wise Money markets data to come

Today, all eyes will be on the European Central Bankís interest rate decision, and Mario Draghiís press conference. With rates expected to remain on hold for the time being, much of investor focus will shift towards the tone of Draghiís comments, gathering any hint of a rate movement later on in 2017. Elsewhere, we have some heavy data out in the US, with unemployment claims being at the fore this afternoon for investors.

Theresa May to attempt to calm fears of Sterlingís volatility

Today, Theresa May will attempt to calm fears of Sterlingís volatility, stating she wants a global UK.

Today, Theresa May will attempt to calm fears of Sterlingís volatility, stating she wants a global UK.

Lancaster House is the venue for investors to keep a keen eye on proceedings. Theresa May will be looking to state a ëcleaní Brexit and seek trading agreements not only with the EU, but other surrounding national counter-parties. With Trump seemingly supporting Brexit, today’s live speech will be the Prime Minister’s chance to stabilise GBP after a rocky few days since its decline when Asian markets opened late Sunday night. The main sticking point has been free movement within the EU which is ërequiredí if access to the single market is to be kept, and no doubt the PM will need to clarify her position if a fair deal is to be concluded.

Donald Trump willing to thrash out deal for UK-US trading agreement

Donald Trump has been quite vocal even before his Presidential campaign with regards to the UKís current position, stating he is willing to thrash out a quick deal for a UK-US trading agreement. Theresa May has been cautious in her acceptance of the good news, insisting no deal can be drafted whilst triggering Article 50 hangs in the balance. There is a meeting pencilled in for the UK Prime Minister to meet with Donald Trump in the US shortly, where there is expected to be some ëoff the tableí conversations on how best to strike a swift deal once Brexit has been officially activated. A quiet day in terms of US data is to follow.

The French Financial Minister, Michel Sapin, has suggested the British government had no back up plan if the Leave vote won in Junes balloting, with the UK now ëimprovising on its Brexit policyí. Mr Sapin wants more clarity on the UKs actual situation and wants Article 50 triggered sooner rather than later. EURO ZEW Survey is out for viewing this morning.

Inflation set to move closer to 2%

As predicted, food sales across the UK rose by 1% year on year in December, as consumers cared not for Brexit, but for spending money over the festive period.

As predicted, food sales across the UK rose by 1% year on year in December, as consumers cared not for Brexit, but for spending money over the festive period.

With inflation set to move closer to the 2% marker, prices are set to increase. Morrisonís and Aldi are already profiting from cheaper prices than the bigger chains. Over the Christmas period consumers are known to treat themselves but some investors also believe we may see a cut down in spending as political issues start to surface once more.

FTSE 100 continues to move upwards

The tube strike over the past two days in London could have a massive effect on the economy, to the tune of ëtens of millionsí. Consumer spending on travel, food and alcohol would be at the forefront of the strike, which could flag up weaker data for January. The FTSE 100 continues to move upwards, as sterling continues to depreciate after Theresa May’s interview over the weekend, with the Market Priced Index having 10 consecutive days of gains.

Mixed bag of unemployment figures for EU

The EU had a mixed bag of unemployment figures, with figures of 8.3% now in unemployment which is the lowest itís been in since 2009. But the worrying rise was in youth unemployment. The number of younger workers out of a job rose 0.3% with Spain the biggest culprit. This is leading to an unbalance in the numbers as the younger generation is seen as key to growth in the long term future. Mario Draghi has stated that his monetary policy could be causing the delicate recovery.

Japanese consumer confidence data for December revealed its highest numbers for 2016, showing 43.1% against Novembers 40.9%, with Chinese CPI data showing a downturn of 2.1% for the same period against previous monthís marker of 2.3%.

Political issues set to continue in 2017

2017 has officially got under way this morning with Wise Money back refreshed after the Christmas and New Year holidays.

2017 has officially got under way this morning with Wise Money back refreshed after the Christmas and New Year holidays.

There are a number of political issues heading our way, most notably the Brexit date in which Theresa May is still looking to trigger Article 50 (end of March 2017) and Donald Trump starting his reign as US President after his win over Hilary Clinton. The Eurozone has its own internal issues to address and the first few data indicators could set the trend early.

German unemployment figures out this morning

German unemployment figures and Consumer Price Index figures are out for viewing this morning, with year-on-year inflation expected to touch 1.4%, its highest number in three years. The figure may boost the Euro slightly however, with the EU extending its Bond Purchasing programme, it is still expected to cause volatile swings for Q1 & Q2.

This afternoon, we view Decemberís US manufacturing ISM survey, with the figures expected to show that the factory sector grew at its fastest pace in nearly two years. With USD soaring close to a 14-year high, expectations not being met could see GBPUSD move higher.

A quiet week for Sterling means it doesnít produce key data until Wednesday with Net Consumer Credit and UK Construction PMI for consumption. Expect the main moves regarding Sterling to be off the back of other currency pairings such as EURUSD.