Sterling Jumps as Brexit Talks Go an Extra Mile

Daily Update - 15th December 2020

Yesterday's Focus

• EUR   Industrial Production Sentix Investor Confidence
• JPY    Industrial Production (YoY)(Oct) 

Yesterday's Explained

It was a relatively quiet day on the Eurozone economic calendar. October industrial production figures for the Eurozone were in focus in the early part of the session. In October, industrial production rose by 2.1%, following an upwardly revised 0.1% gain from September. Economists had forecast a 2.0% rise.

European Central Bank can still provide more stimulus if needed to counter any drag on inflation, including from the firming euro against major currencies, ECB board member Fabio Panetta said on Monday.  "We stand ready to adjust all our instruments if downside risks to the outlook materialise, including those stemming from exchange rate dynamics," Panetta said. "Indeed, an appreciation of the euro could significantly affect euro area inflation." 

The greenback pared its losses after falling to its lowest level since April 2018 on Monday and staged a broad-based rebound in New York as investors booked profits on its recent losing streak. Sterling gapped higher in New Zealand on Brexit optimism and jumped one percent before paring intra-day gain.

Sterling held on to gains made against the dollar and the euro on Monday after Britain and the European Union extended discussions on a post-Brexit trade deal beyond the previous day’s deadline. The EU’s Brexit negotiator, Michel Barnier, said a new pact with Britain was still possible as negotiators sought to break deadlocks on access to fishing waters for EU vessels and corporate economic fair-play rules. 

 

 

Today’s Market

• AUD RBA Meeting Minutes
• GBP Claimant Count Change(Nov),ILO Unemployment Rate (3M)(Oct)
• CAD BoC's Governor Macklem speech
• CNY Retail Sales (YoY)(Nov)​

Today’s Focus

It’s a relatively quiet day ahead on the economic calendar. Finalized inflation figures from France and Italy are due out later today.The numbers are unlikely to have a material impact on the European majors, however. From the U.S, NY Empire State Manufacturing figures for December and November industrial production figures will draw interest late in the session.

Ahead of the European open, industrial production, retail sales, and unemployment figures from China will set the tone.

Away from the economic calendar, COVID-19 news updates and any chatter from Capitol Hill will need monitoring.