15/11/16 - Trump Awards Key Roles

USD

US President-elect Donald Trump has awarded key roles in his incoming team to Reince Priebus and Stephen Bannon. Priebus is chairman of the Republican National Committee (RNC), and will be Trump’s chief of staff. Stephen Bannon, from the Breitbart News Network, will serve as Trump's chief strategist. In a statement released by his campaign, Mr Trump described Mr Priebus and Mr Bannon as "highly qualified leaders who worked well together on our campaign and led us to a historic victory". Donald Trump will take over at the White House on 20 January 2017, when Barack Obama steps down after two terms in office.
 
Since Trump's victory last week, investors have been betting on his campaign pledges to simplify regulation in the health and financial sectors, and boost spending on infrastructure.
 
The Federal Reserve is increasingly expected to raise interest rates at its December meeting, with traders now pricing in an 81 percent chance of a hike.
 

GBP

Sterling weakened against the stronger Dollar on Monday, though it has traded resiliently against the Euro, which remains one of the biggest losers of last week's election win for Donald Trump. The Pound has so far benefitted in the post-Trump era, after the President-elect’s pledge to put the UK at the ‘front of the queue’ in any trade deal negotiations.
 
In September, CPI showed a strong 1.0% rise and for October is expected to print at 1.1%. Should inflation continue to increase, this could lead to further appreciation in Sterling as it will decrease the probability of the Bank of England cutting interest rates in December.
 
For the rest of this week, focus is on Britain's economy, with UK inflation out this morning, unemployment on Wednesday and retail sales on Thursday.
 

EUR

The Euro could weaken further in the near-term, should investors continue to worry over US-Eurozone relations and potential for internal EU political tensions. Political uncertainty has been weighing on the outlook for the future of the currency, in the run-up to a referendum in Italy and a presidential election in Austria. After the unexpected triumph of Donald Trump in the US, concerns are growing that a similar populist, right-leaning vote will emerge in Europe.

Today also sees the German and Eurozone ZEW sentiment index out, which is considered a good indicator of future growth. The ZEW is composed of interviews with financial professionals and is considered a good leading index.

Key Announcements

9:30 AM – GBP : CPI year on year, expected at 1.1% against a previous of 1%

10:00 AM – EUR : German ZEW Economic Sentiment, expected at 7.9 against a previous of 6.2

13:30 PM – USD : Core Retail Sales m/m, expected at 0.5% against a previous of 0.5%

13:30 PM – USD : Retail Sales m/m, expected at 0.6% against a previous of 0.6%