Daily Brief

Daily Brief

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Sleeping off the turkey

Compare and contrast

Since Monday morning GBP/USD has covered a range of +/- 0.3% and it is net unchanged over the three days. Over the same period the range of America's DJ30 stock index was +/-3.0% and it is a net 1.2% higher.

This illustrates a couple of points: 1) The foreign exchange market is more grown-up than the stock market and 2) Nothing much happens in the FX world when London is on holiday. It is also a reminder that major currencies - even sterling - tend to be less scary than equities. In the two and a half years since the Brexit referendum sterling has fallen by 15% against the US dollar and the euro: The FTSE100 index has lost that much since May.

Other currencies which did not move during the Christmas/Boxing Day break were the euro, the Swiss franc, the Japanese yen and the Canadian and Australian dollars. The South African rand Norwegian krone did best, strengthening by 0.2%, while the NZ dollar and Swedish krona were 0.2% to the rear.

All the data

The United States managed to wheel out a single solitary statistic on Christmas Eve and Japan came out with a couple on Christmas Day. Both of them published a couple of ecostats on Boxing Day, if only to prove how diligent they are.

Monday's offering was the Chicago Fed's National Activity Index, which aims to measure, er, national activity and "related inflationary pressure". At 0.22 it was a little more positive in November than the neutral reading reported for the previous month. The three ships that came sailing in on Christmas Day in the morning were Japan's coincident and leading economic indicators and the minutes of the Bank of Japan policy meeting.

On Wednesday America's Johnson Redbook Index, a barometer of retail sales, was up by a monthly 0.1% and 7.8% higher on the year in December. The Case-Shiller home price index was up by an annual 5.0% in October and the Richmond Fed's manufacturing index was 22 points lower at -8 in December.

Back to work

Japan set the ball rolling this morning with housing starts, which were down by an annual 0.6%. There is almost nothing on today's list for Europe and not much more than that from the States. Fortunately, Japan fills the void tonight.

Switzerland's ZEW survey of business confidence comes out this morning and Spain will report on November retail sales. After lunch there are US figures for jobless claims, consumer confidence and new home sales.

The numbers from Japan tonight cover consumer prices, unemployment, industrial production and retail sales, as well as the Bank of Japan's projections for inflation and growth.  

GBP flat on average against the other majors

GBP flat on average against the other majors

EUR and USD unchanged over the break

EUR and USD unchanged over the break

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