Daily Market Report - 29/02/2016

GBP

Friday saw the recent GBP weakness continue as the threat of a Brexit is ever growing. British voters will be casting their vote on the 23rd of June to decide if Britain should stay in the EU or not. However concerns over the systemic consequences are growing as a Brexit would massively threaten the huge foreign investment flows and the UKs current account deficit – one of the biggest in the developed world.
Sterling fell to a 7 year low against the dollar and decreased 0.65 per cent during the day which ended a 3.7% decrease over the course of last week which left the pound on track for its biggest weekly loss since 2009.
 

USD

The dollar rose broadly on Friday after strong figures were released across the board; A revised university of Michigan consumer sentiment, personal spending MoM, Core producer price index, and preliminary GDP Price index QoQ all coming in stronger than forecast.
With U.S nonfarm payroll report in at the end of this week a robust NFP figure will certainly put the greenback in a very strong position for another rate hike. With investors firmly anticipating the FED meeting in March to see if a rate hike will materialise or if any indication is given as to when this might be. The dollar index rose 0.86 percent to a three week high on Friday.
 

EUR

German preliminary CPI MoM decreased to 0.4% against a forecast of 0.6%. Nevertheless we saw EUR strengthen against GBP due to the Brexit situation but down 0.8 percent against the dollar, given the strong USD figures from Friday.
 

Key Announcements

09:30 – GBP: Net lending to individuals MoM forecasted at 5.2B against previous of 4.4B
09:30 – GBP: Mortgage approvals forecast at 74K against previous of 71K
10:00 – EUR: CPI Flash estimate YoY 0% against forecast against previous of 0.3%
10:00 – EUR: Core CPI Flash Estimate forecast at 0.9% against previous of 1.0%
14:45 – USD :Chicago PMI forecasted at 52.1 against a previous of 55.6