Coronavirus Outbreak in China as the Focus Shifts to Employment Numbers and the GBP

Daily Update - 21st January 2020

Yesterday’s Focus

• China PBOC Interest Rate Decision
• Germany Producer Price Index

Yesterday’s Explained

China People’s Bank of China resulted negative but yet the markets reacted very positively towards the Chinese Vs U.S Trade phase signed last week. Later on the day, Germany released their Producer Price Index which came out positive and supported the struggling Euro yesterday in the latter part of the week.

 

Today's Market

• JPY BoJ Monetary Policy Statement, Boj Interest Rate Decision

• GBP ILO Unemployment Rate

• EUR ZEW Survey

Today's Focus

For the EUR, It’s a relatively busy day ahead on the economic calendar, with ZEW economic sentiment figures for Germany and the Eurozone due out. With the ECB expecting sentiment and the economy to have bottomed out, the sentiment figures will need to mirror the ECB’s view to support the EUR. Forecasts are mixed, however, with the sentiment in Germany expected to improve and sentiment in the Eurozone to deteriorate.

For the Pound, It’s a busy day ahead on the economic calendar, with employment and wage growth figures due this afternoon. While the unemployment rate will garner attention, the focus will be on the claimant count and average earnings numbers. Another set of disappointing figures will likely pave the way for the BoE to cut rates on Thursday. On the Brexit front, the countdown continues, with 10-days remaining until Britain leaves the EU.

Across the Pond, It’s another quiet day on the data front, with no material stats due out of the U.S to provide direction. Following Monday’s close, we expect the markets to look ahead to key stats later in the week. Sentiment towards the U.S economy has vastly improved since the 3rd quarter, so downside for the Dollar should be limited.