U.K Retail Sales Rise Less Than Expected, Euro-Zone Industrial Orders Climb 1.6%

Fundamental Headlines

• Global Bank Shares Slide on Obama Plan – Wall Street Journal
• Brown Ponders Spending Jobless “Windfall”  – Financial Times
• Greece Will Fix Itself from Inside the Euro-Zone  - Financial Times
• U.K. Retail Sales Climbed 0.3% in December, Less Than Economists Forecast – Bloomberg
• Greek Economy Tied to Euro, Central bank Chief Says - Bloomberg



GBP/USD – U.K.’s retail sales rose 0.3% in December after slipping 0.3% the month prior, with economists’ expectations of 1.1%, casting doubt on the strength of the recovery in the region, the National Statistics in said announced. Climbing shy of expectations, many investors may expect GDP for the fourth quarter to widen more than the forecasted -2.9% from a year ago on Tuesday January 26th at 9:30 GMT as consumers in Great Britain begin the start of the new year against the wall. Looking ahead, price gains challenge’s the Bank of England and their ultimate decision to extend their 200 billion pound bond-purchase plan. At the same time, investors forecast a zero percent probability that the central bank will raise interest rates at its next policy meeting, but expect rates to rise 67bp over the next twelve months, according to the Credit Suisse overnight index swaps index.  To discuss this and other topics, please visit the GBP/USD Forum.


EUR/USD –  Euro-zone industrial new orders in November climbed 1.6% subsequent to declining 2.2% the month prior, surpassing expectations of 0.5%, while the annualized reading slipped 1.5% after tumbling a revised 14.4% in October. The breakdown of the report illustrated that monthly orders in Estonia lead the rally, gaining 7.4%, and was followed by a 7.3% rise in Greece, while orders in Hungary plunged 9.6% to taper the advance. Looking ahead, the ECB pledged to normalized policy this year and will continue to gradually unwind the emergency measures taken during the financial crisis. At the same time, the central bank stated that a sharp rise in public borrowing carries a “risk of triggering rapid changes in market sentiment, leading to less favorable medium and long-term market interest rates.” Therefore, as fears of a protracted recovery persist, policy makers will likely maintain its current policy throughout the first half of 2010 in order to balance the risks for growth and inflation. To discuss this and other topics, please visit the EUR/USD Forum.