Daily Market Report - 16/02/2016

GBP

Yesterday HSBC Chief Executive Officer Stuart Gulliver said the lender would probably move about 1,000 investment bankers to Paris in the event of a “Brexit” even as he pledged to keep the bank’s headquarters in London ahead of a U.K. referendum on EU membership in the coming months. His comments echo Barclays Plc Chairman, who said a vote to quit the bloc would leave the City of London’s financial district in a “significantly worse” position. Royal Bank of Scotland Group CEO said in an interview with the BBC last week that Britain’s financial sector would be better off staying inside the EU, while Deutsche Bank AG analysts warned British stocks could fall 15 percent on a vote to leave.
Sterling fell around half a percent against the dollar yesterday after Bank of England policymaker Ian McCafferty said inflationary pressures had fallen, although he still expected the next interest rate move to be up. McCafferty, who dropped his lone call to hike interest rates earlier this month, said the central bank was not "out of ammunition" if it needed to fight a renewed downturn by cutting interest rates or restarting its bond-buying program.

EUR

President Mario Draghi had a speech yesterday which signalled potential that further monetary policy easing is likely in March saying the ECB is ready to do its part. “In the light of the recent financial turmoil, we will analyse the state of transmission of our monetary impulses by the financial system and in particular by banks,”, the ECB will examine the impact of renewed declines in energy prices and “if either of these two factors entail downward risks to price stability, we will not hesitate to act,” he said.

CNH

A slide in China’s exports in January was eclipsed by an even bigger tumble in imports, leaving a record trade surplus for the world’s biggest trading nation. Overseas shipments declined 11.2 percent in January in U.S. dollar terms from a year earlier, the customs administration said on Monday, compared with a 1.4 percent drop in December. Imports extended a stretch of declines to 15 months, tumbling 18.8 percent, leaving a record trade surplus of $63.3 billion. The slide in exports underscores the fragility of global demand and signal that policy makers may accelerate fiscal and monetary easing. The People’s Bank of China has held the main rate at a record low since October.

Key Announcements

09:30 – GBP: UK Core Consumer Price Index (Jan) expected to rise to 0.3% from 0.2%