Daily Market Report - 14/01/2016

GBP

Over the Christmas period British retail spending recorded its weakest quarterly growth in more than a year as stores competed to offer discounts, industry data showed. The British Retail Consortium said retail spending rose by a "disappointing" 0.9 percent in the three months to December compared with a year earlier. It was the slowest rise in retail sales values since the three months to November 2014. In December alone, retail sales rose just 1.0 percent after a 0.7 percent increase in November. Bank Of England Govenor Mark Carney recently said Britain is not in the grip of a "debt-fuelled recovery" stressing the UK's economic growth remains sustainable. He said private sector debt had come down substantially in the wake of the financial crisis, but warned that rising levels of household debt still posed an "indirect" threat to the economy.

USD

A Federal Reserve Survey showed the U.S. economy expanded across most of the country in the past six weeks as the job market showed strength . The central bank’s ‘Beige Book economic survey’ showed that two of the 12 Fed districts posted “moderate” growth and seven described the expansion as “modest.” Boston contacts were described as “upbeat,” while the New York and Kansas City Fed districts reported “essentially flat” economic activity. The report released yesterday in Washington underscores the challenge facing Fed policy makers heading into their meeting later this month: The labor market is strengthening without triggering signs of higher wages or inflation more broadly. 

EUR

Yesterday we saw industrial production in the post a decline of 0.7% in November 2015, compared with the previous month. In terms of the yearly change, we saw an increase of 1.1%, less than the forecast of 1.3%. The market was expecting the volume of production of Industries such as factories and manufacturing to decrease by 0.3% in November 2015, compared with the previous month. The outcome was disappointing, as the Euro Area Industrial Production declined by 0.7%.

Key Announcements

GBP: 12:00 – BOE Interest Rate Decision Expected to stay the same at 0.5%
GBP: 12:00 – BOE Monetary Policy Summary
GBP: 12:00 – BOE MPC Vote Unchanged Expected to stay the same at 8
GBP: 12:00 – BOE MPC Vote Hike Expected to stay the same at 1
EUR: 12:30 – ECB Monetary Policy Meeting