Daily Market Report 21/01/2013

Following the lower than expected retail sales figures on Friday, sterling continued to trade lower against its peers over added concern that Britain could be facing a triple dip recession.

With UK GDP figures due to be released this Friday, which would ascertain whether Britain is indeed heading down this path, Chancellor George Osborne looks set to face pressure to sacrifice inflation targets and reduce austerity in order to stimulate growth in the economy. The Bank of England Minutes vote is due to be released this Wednesday and could provide insight whether the Bank of England are considering further stimulus.

With the US on holiday today for Martin Luther King Day, investors will be focusing on the Eurogoup meeting in Brussels at 4pm, where finance ministers will be discussing Spain, Cyprus and Greece as well as the recapitalization of banks in the euro zone.

Data released this morning showed that UK house prices had risen by 2.4% year on year and Germany’s producer prices fell 0.3% against expectations. The lower prices should help limit inflation which rose on average 2% last year and thus the news will be welcomed by the European Central Bank.

Key Announcements

16.00pm  - Eurogroup Meeting