Daily Market Report - 01/02/2016

USD

The US Dollar held firm during Friday’s session despite the advance GDP figure coming in below forecast at an increase of 0.7%. The US economy expanded at a slower pace in the fourth quarter as households tempered spending and businesses cut back on capital investment and adjusted inventories.

Growth has downshifted as producers contend with slowing markets abroad, the negative effect on exports from a stronger dollar and plunging oil prices that have caused drilling firms to retrench. Consumers, enjoying the fruits of a robust labour market and cheaper fuel bills, will have to pick up the slack if growth is expected to get back on track.

EUR

The Eurozone’s CPI figure showed Inflation has risen to its highest level since October 2014 despite the falling oil prices. The figures came after Mario Draghi, the president of the European Central Bank, repeated his commitment to returning inflation to its target of 2%. 

Draghi is poised to deliver another shot of quantitative easing into the veins of the eurozone economy at the ECB's next major meeting in March, amid fears the central bank is losing credibility and could even be forced to lower its inflation target.

 

Key Announcements

09:30 – GBP – Manufacturing PMI is forecast to decline to 51.8 from 51.9

15:00 – USD – ISM Manufacturing is forecast to increase to 48.6

16:00 – ECB president Draghi speaks