Economic data released through the Asian session this morning was on the lighter side. January fixed asset investment, retail sales, and industrial production figures were released out of China. Earlier on in the session, February house price figures were also released out of the UK.
Out of China,
- Retail sales rose by 8.2% in January, year-on-year. Sales came in ahead of a forecasted 8.1% increase, whilst in line with December’s 8.2%.
- Fixed Asset investment rose by 6.1% in January, year-on-year. While in line with forecasts, investment picked up from a 5.9% rise in December.
- Industrial production increased by 5.3% in January. Falling short of a forecasted 5.5% increase, production eased from December’s 5.7% rise.
Finalized February inflation figures are due out of Germany and France later this morning. We would expect the EUR to ignore the figures, barring a material deviation from prelim numbers.
With the economic calendar likely to be of little influence, market risk sentiment through the day will remain the key driver. Updates on trade talks between the U.S and China and Brexit will be in focus through the day.
There are no material stats scheduled for release through the day, leaving the Pound in the hands of Brexit chatter and Parliament.
While Theresa May’s struggles continue, the Pound found some much-needed support on Wednesday. The 2% rally came off the back of Parliament voting against a no-deal Brexit.
The next vote is on whether to extend Article 50 and the vote will be later today. A vote in favor of an extension will see the British government request an extension from the EU. A vote against an extension would leave the option of re-voting on the existing deal or for Britain to leave the UK without a deal.
Today’s vote could see the Pound give up Wednesday’s gains, with interest, in the event that MPs vote against an extension. An extension and we’ll be talking about Brexit for a little while longer, though Theresa May would possibly be on the way out…
The general consensus is that MPs will vote in favor of an extension, which would be positive for the Pound. There could be a surprise, however.
The weekly initial jobless claims and February import and export price figures are due out this afternoon, ahead of January new home sales figures.
Barring a jump in initial jobless claims, we would expect the numbers to have a limited influence on the Dollar.
Risk sentiment will continue to impact the Dollar. A Parliamentary vote in favor of an extension to Article 50 later today would likely add further pressure on the Dollar later in the day.
January house price figures are due out later today. The numbers are unlikely to have a material influence on the Loonie through the day.
Of greater influence will be moves in the price of crude oil. Today’s OPEC monthly report could deliver a boost should OPEC project lower output and relatively stable demand.
China’s industrial production figures, released during the Asian session, had limited influence on crude oil prices early on. Sentiment could change later in the day…