Daily Market Report 15/01/14



Britain’s inflation rate has finally returned to the government’s 2% target, bringing some relief to households and businesses after the long squeeze on living standards.The Office for National Statistics reported that prices, as measured by the consumer prices index, rose by just 2.0% annually in December.  Food prices rose by less, while the cost of toys and computer games dropped – suggesting heavy discounting by shops in the run-up to Christmas.This is also welcome news given that December saw an increase in petrol prices and the first tranche of price hikes from the energy companies. Given how reliant the UK is on imported goods the pound has risen 7.6% since July this has reduced the price pressure on imported goods that has helped this figure.

US retail sales for December came in higher than expected building expectations the economy would continue to strengthen . The core figure was better than expected; overall sales grew by just 0.2% in December up from .1% in November given a large decline in sales of automobiles, mainly due to the cold weather this was a good result. 

EUR Industrial production across the 17 countries that shared the euro in November rose at the fastest pace in 3½ years, an indication that the currency area’s economy likely grew for the third straight quarter as 2013 drew to a close. The increase in industrial production was spread across much of the euro zone, with Germany recording a 2.4% rise, France a 1.4% increase, Spain a 1% rise and Italy a more modest 0.3% increase. Output also rose in Ireland and Portugal, but fell 2.2% in Greece. Estonia was the only other member to record a decline. 


The Rand declined as Statistics South Africa said growth in mining output slowed to 5.1% in November from a revised 23% the previous month. The most powerful labour group at the South Africa’s platinum mines plans meetings with its members this week to discuss striking over pay.  


At 10:00am this morning we have the November trade balance for the Eurozone, expected to show a 16.7 billion surplus.  In the US we have mortgage applications for the first week of January. Mark Carney is speaking today at 14:15 to discuss financial stability in the UK. 

Key Announcements: 

10:00 – EUR -Trade balance (Nov) surplus up to 16.7B from 14.5B

12:00- USD- Mortgage applications (Jan 10)

14:15- GBP- Mark Carney Treasury Select Committee hearing