Daily Market Report 16/01/2014



Applications for U.S. home mortgages jumped in the latest week, extending a recovery from a 13-year low at the end of December. This figure that  which includes both refinancing and home purchase demand, rose 11.9 %in the week ended January 10. The number of loan requests for home purchases, a leading indicator of home sales, gained 11.5 percent. This is a positive figure as us households are feeling more certain about their future and are looking to buy a house. Also the US Producer Prices index showed a 0.4% rise in December. This is the biggest rise since June 2013, showing that firms paid more for their raw materials. But over the last year, prices are up just 1.2%, showing little inflationary pressure. Most of December’s PPI rise was due to higher gasoline costs, which rose 2.2%. We saw some pound strength off the back of these figures yesterday.


The Eurozone had a net surplus of €17.1bn, up sharply from the €12.5bn  figure surplus 12 months ago. Imports were down 5% compared with a year ago, while exports fell by 2%. That pushed the Eurozone’s total trade surplus for the first 11 months of last year to €139bn. So far this year, Eurozone exports are up 1%, while imports are down 4%, reflecting the re-balancing in those countries experiencing austerity programmes.


Mark Carney played down fears of a housing bubble – even though house price rises aren’t expected to ease off until 2016. The general expectation has been for a continuation of current momentum – house price momentum, mortgage activity, credit growth momentum – into 2014, before decelerating around the middle of 2015, towards 2016. Mark Carney  also denied that household debts are approaching a danger zone.


We have inflation figures for the Eurozone at 10:00 expected to fall to .8% for 2013.  At 13:30 the US also release their final inflation figure for 2013 with it expected to come in at 1.5% we also have some employment figures in the US also set to be released at 13:30


Key Announcements:
10:00 – EURConsumer Price index Year on Year (Dec)  expected to fall to .8%
13:30 – USD- Consumer price Index Year on Year (Dec) expected to rise to 1.5%
13:30 –  USD-Initial jobless claims (Jan 11th)
13:30 –  USD-Continuing jobless claims (Jan 4th)