23/02/2017 - Macron Presidential Campaign Boosted

EUR

Yesterday morning, the Euro was on the back foot as a result of further gains seen in the polls for the far-right French presidential candidate Marine Le Pen. However, later in the day veteran French centrist Francois Bayrou announced that he was offering an alliance with independent candidate Emmanuel Macron, in a move that could give the former investment banker a much-needed boost to reach the runoff in May's presidential election. Macron has been a pro-EU voice in the French election campaign, pitted against the anti-EU Le Pen and the right-wing Fillon, who also does not appear to be an EU fan.

GBP

The Pound slipped following the release of the UK’s 4th quarter GDP figure. Although the figure was revised upwards to 0.7% from 0.6% quarter on quarter, on an annual basis growth slowed down to 1.8% from 2.0%, suggesting a weaker start for 2017. The economy grew slightly more in the last three months of 2016 than previously thought, mainly due to a stronger performance from manufacturing.

USD

The minutes of Federal Open Market Committee’s latest meeting revealed that officials expressed confidence that they can raise interest rates gradually, while a hike “fairly soon” might be appropriate to avoid the risk of an overheated economy. Fed officials are concerned about Trump’s potential fiscal stimulus plans, and the effects of a rising Dollar. The minutes are in line with Janet Yellen’s comments to Congress in her semi-annual testimony last week that “a further adjustment of the federal funds rate would likely be appropriate” if the economy continues to evolve in line with their expectations.

Key Announcements

13:30 : USD – Unemployment claims, expected at 242K against a previous 239K

16:00 : USD – Crude Oil Inventories, expected at 9.5M