mask Markets in Dull Holiday Trading

27/ 12/ 2017

Markets in Dull Holiday Trading

Daily Update - 27th December 2017

Yesterday’s Focus

  • JPY BOJ Monetary Policy Meeting Minutes

Yesterday’s Explained

A Quite day observed after Christmas Holiday as most markets were closed due to Boxing Holiday. Bank of Japan released some low tier data which posted to be positive along with their Monetary Policy meeting minutes which indicated that Kuroda’s Projections for the Year 2018 is going to be positive than 2017.

 

Today’s Focus

  • US Pending Home Sales

Today’s Focus

While Europe reopens for business today, there are no material stats scheduled for release out of the Eurozone to provide direction for the EUR.The lack of data will leave the markets to consider the current geo-political risks that are circling above the Eurozone. German Chancellor Merkel is looking to reform the grand coalition by mid-January and there will likely be more news hitting the wires over the Catalonia election and what lies ahead for Spain and Catalonia’s independence movement.

For the Pound, data is limited to BBA Mortgage Approval figures, which are unlikely to have too much of an impact this morning. Progress on Brexit negotiations and how the UK economy performs will remain the key themes for the Pound in the coming months. We may even see Theresa May come under greater scrutiny from within the Tory Party.

The good news for now will be the resilience in the UK economy and should Brexit talks, trade in particular, go well, the British government and UK economy may well have dodged a bullet. There’s still a long way to go though and the transition period for Britain to be free from EU regulations will also be a factor for the markets to consider.

Across the Pond, economic data out of the U.S this afternoon includes December’s CB Consumer Confidence figures along with November’s pending home figures. Dollar weakness has certainly been a theme in recent months and, while the markets may have expected a Dollar rally off the back of the tax reform bill, the dovish FED poured cold water on any policy driven moves. In the last minutes, the FED was clear in the fact that it had considered the tax reform bill in its rate path projections. The fact that the FED has held on to a 3 hike projection is the disappointment and Trump may struggle to deliver on other growth policies, unless they are self-funded.