Daily Brief

Daily Brief

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Equities lead the way

USD

The main action on Wednesday took place in equity markets. US share prices more than recovered the losses they had suffered on Christmas Eve, logging their biggest rally since 2009. The USD felt the benefit of the upsurge.  However, neither stocks nor the USD were able to generate follow-through in the Far East and Europe this morning. 

Yesterday's economic data did not trouble the USD. The Redbook Index, a barometer of retail sales, inched higher in December for an annual rise of 7.8%. S&P's Case-Shiller house price index was up by an annual 5.0% and the Richmond Fed's manufacturing index was down by 22 points at -8. Today's numbers cover weekly jobless claims, consumer confidence and new home sales for November.

EUR

The EUR covered a range of almost one cent, first on the retreat and then on the advance. It is a net 0.2% firmer on the day and, coincidentally, on the week. With most of Europe enjoying a two-day break, domestic currency activity was minimal: the moves were entirely driven by USD action.

The only statistical input from the euro zone this morning came from Spain, where retail sales increased by 1.4% in the year to November. In Frankfurt the European Central Bank published its Economic Bulletin, which appears two weeks after each meeting of the Governing Council. It added some detail to the information that appeared on 13 December but contained no surprises.

CAD

A range of less than one cent covered the USD's progress against the CAD.  It is unchanged on the day. A two-day break in Canada meant that no domestic data made an appearance. Indeed, none are scheduled for the entire week.

The Loonie received some help from oil prices, which were carried higher in the wake of the stock market rally.

GBP

Britain's statisticians were not in any hurry to swing back into action this morning after their two-day break. No UK ecostats are due until tomorrow's snapshot of mortgage lending. 

All is quiet on the Brexit front too, but that silence has not done much for the GBP. It is down by 0.4% on the day against the USD.

JPY

The path of USD/JPY was not dissimilar to that of the DJ30. In the end the yen lost a net 0.2% to the dollar.

Japanese data released overnight related to housing starts and construction orders, neither of which traditionally have any noticeable impact on the value of the currency. Housing starts were down by 0.6% in the year to November while construction orders declined by 10.7% over the same 12 months.

USD higher on most fronts, tracking share prices

USD higher on most fronts, tracking share prices

EUR out of the action and unchanged

EUR out of the action and unchanged

CAD steady, helped by oil

CAD steady, helped by oil

GBP lower despite Brexit silence

GBP lower despite Brexit silence

JPY slightly lower as risk-appetite improves

JPY slightly lower as risk-appetite improves

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