News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
More View more
Real Time News
  • AUD/JPY IG Client Sentiment: Our data shows traders are now net-long AUD/JPY for the first time since Sep 16, 2020 11:00 GMT when AUD/JPY traded near 76.69. A contrarian view of crowd sentiment points to AUD/JPY weakness. https://www.dailyfx.com/sentiment https://t.co/ixxjaexZoP
  • The US Dollar is struggling against ASEAN currencies despite weakness in the S&P 500. Capital remains flowing into emerging markets, keeping USD under pressure, could this change? Find out from @ddubrovskyFX here:https://t.co/nwhy3XhE74 https://t.co/5S6AARA0DA
  • Gold prices is consolidating at US$ 1,868 - its 100-Day Simple Moving Average (SMA) line. Will it hold above this key support level? https://t.co/o0BM7ABeka
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.23% Gold: -0.07% Silver: -0.97% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/X6JBrsCCnF
  • While @IG_US Client Sentiment is offering a mixed outlook for the S&P 500 and #Dow Jones, these could be at risk to a turn lower based on multiple bearish technical warning signs. Get your market update from @ddubrovskyFX here:https://t.co/9kYnq6hH1f https://t.co/bLHDVvd44Q
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.15% 🇳🇿NZD: 0.11% 🇨🇦CAD: 0.06% 🇪🇺EUR: -0.01% 🇨🇭CHF: -0.01% 🇯🇵JPY: -0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/p80ihot5KY
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.00%, while traders in EUR/GBP are at opposite extremes with 67.34%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/PHdbvQq8kU
  • Copper prices may continue to push higher despite a worrying surge in Covid-19 cases and the lack of progress in Congressional stimulus negotiations. Get your #copper market update from @DanielGMoss here:https://t.co/N2OW566nID https://t.co/VJfjTNDdZI
  • The US weekly jobless claim number came in at 870k, in line with expectations. This marked a 4th consecutive weekly reading below 1 million mark, but the rate of improvement in the jobs market appeared to have slowed recently. https://t.co/7pEUQk80C8
  • What is the outlook for financial markets ahead of the first presidential debate and how are Democratic nominee Joe Biden and President Donald Trump doing in the polls? Find out from @ZabelinDimitri here:https://t.co/QQwAZTxZFg https://t.co/MSOw9DeSxe
Brexit Briefing: Pound Dithers as Consumer Spending Cools, But Rate Hike Hopes are Shifting

Brexit Briefing: Pound Dithers as Consumer Spending Cools, But Rate Hike Hopes are Shifting

2017-02-13 15:31:00
Oliver Morrison, Analyst
Share:

Talking Points:

- Fresh signs that British consumers are reigning in their spending.

- Accelerating inflation is good news for the BoE hawks and the Pound.

- Sterling stays flat against the Dollar and Euro for time being.

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.

The British Pound is struggling for momentum amid more signs that consumer spending is slowing. Credit card spending in the UK in January grew at one of the slowest annual rates of the past three years, data from Visa showed Monday, rising 0.4% year-on-year, down from 2.5% in December.

On the month, Visa said consumer spending climbed 0.5% after a 2.5% drop in December. But the data tie with other signs that Brits are reigning in their spending. The British Retail Consortium reported last week that spending in the November-January festive period rose by the smallest amount since the financial crisis, while the Confederation of British Industry said its January retail gauge dropped by the most since records began in 1983.

Official retail sales data are due Friday, with forecasts calling for an on-year rise of 3.9% in January – down from 4.9% previously – and a monthly rise of 0.7% compared to the 2% drop in December.

Economists have also been long warning that rising inflation – caused by the Pound’s post-Brexit vote fall – will squeeze peoples’ incomes in 2017 and threaten economic growth. As a result of this rising inflation “households' purchasing power will be squeezed further which, combined with relatively muted consumer confidence, may lead expenditure to settle on a slower growth trajectory in 2017," said Annabel Fiddes, an economist at IHS Markit, which compiled the data for Visa.

Any threat to economic growth is, of course, Pound-negative, as is the Bank of England’s current dovish stance on rates. Inflation is rising, but Carney and Co will only look to raise rates if it is seen to be rising faster than it expects. The Bank held rates at the record low 0.25% on February 2, stressing uncertainty in the run up to the triggering of Article 50 and that consumer spending and investment are likely to weaken this year.

However, the consensus on the BoE’s stance on rates is beginning to shift. Last week, Kristin Forbes, a member of the Bank’s Monetary Policy Committee, said she disagreed with the BoEs policy to keep rates low. She said inflation is getting out of hand and the best way to control it is by raising interest rates. She also said the robust performance of the economy in the wake of last June's Brexit vote confirms her gut feeling that the UK would ride out the referendum better than most economists expected. That’s backed up by news today that the FTSE 250 (which is far more domestically focussed than the 100) reached a fresh record high this morning, dispelling much fear of economic peril upon activating Article 50 next month.

And many economists seem to be agreeing with Forbes. According to a Bloomberg survey, 87% of analysts think that the BoE’s next move, after its current neutral stance, will be an interest rate hike, up from 65% a month earlier.

Inflation data released tomorrow is forecast to show consumer-price growth accelerated to 1.9%, the fastest since 2014. If that data, along with employment data, surprise to the upside the markets may again bring forward their rate-hike expectations, thus boosting the Pound.

But Brexit is still a concern for many. More than a quarter of employers in Britain say staff members from other European Union countries have considered leaving their firms or the country in 2017 after last year's Brexit vote, the Chartered Institute of Personnel and Development said Monday.

And the shifting rate hike expectations – nascent as they are – have failed thus far to give Sterling pairs much impetus. The British Pound has remained flat against the US Dollar in Monday trading. GBPUSD currently trades at 1.2492, up 0.02% for the day. Sterling has also been able to capitalise on the weak Euro, which remains under pressure from stubbornly low inflation and political concerns. EURGBP currently trades at 0.8487, a drop of 0.38% on the day.

Markets

Index / Exchange Rate

Change (Exchange Hours/GMT Session Rollover)

Market Close/Last

FTSE 100

0.52%

7,297.00

DAX

1.12%

11,798

GBP/USD

0.02%

1.2492

EUR/USD

-0.35%

1.0603

EUR/GBP

-0.38%

0.8487

Upcoming Event Risk

Events

Date, Time (GMT)

Forecast

Previous

UK Consumer Price Inflation

February 14, 0900 GMT

1.9%

1.6%

UK Claimant Count rate

February 15, 0930GMT

2.3%%

2.3%

UK Retail Sales (Jan y-o-y)

February 17, 0930GMT

3.9%

4.9%

--- Written by Oliver Morrison, Analyst

To contact Oliver, email him at oliver.morrison@ig.com

Don't trade FX but want to learn more? Read the DailyFX Trading Guides

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES