Daily Market Report - 11/02/2016

GBP

Yesterday we saw manufacturing figures released from the U.K. Manufacturing production fell for the third straight month in December. The UK. Office for National Statistics said that manufacturing production decreased by 0.2% in the month of December.The figure was below expectations for a gain of 0.1% and following a decline of 0.3% a month earlier.
 
On an annualized basis, manufacturing production fell at rate of 1.7%, again worse than estimates for a decline of 1.4%. Figures released yesterday also showed that showed that industrial production fell by a seasonally adjusted 1.1%, compared to forecasts for a drop of 0.1% and following a decline of 0.8% in the previous month. The data added to a constant trend of pound weakness since the beginning of 2016
 

USD

Yesterday we had Janet Yellen testifying to congress, with some of her comments causing dollar weakness against all currency pairs with investor’s interpreting Yellens speech as dovish. The general message delivered was that additional rate hikes are still on the agenda, however, global markets have to stabilise before we see more. Fed funds futures rates show that markets see less than a 6 percent chance of a rate increase in March. According to CME Group's Fed Watch tool there is now only a 37 percent chance of interest rates going up this year. 
 

Key Announcements

13:30 – USD – Continuing Jobless Claims expected to fall to 2.250M



13:30 – USD – Initial Jobless Claims expected to fall to 281k