Bungee Jumping Cable

Bungee Jumping Cable

Cable dropped off a cliff last week. Whilst it had climbed
in the week leading up to the New Year as the US edged ever closer to the fiscal cliff, it was actually the FOMC
minutes, released last week that hinted of a potential reduction in monetary
easing and interest rate rise, which pushed the pair over the edge. As the
bungee cord held late last week, today we will see whether the Pound can
actually catapult itself back up towards the 16 month highs that the pair had
experienced ‘pre-jump’.

With the Christmas period now over and the fiscal cliff
disaster averted, or at least slightly postponed, economic data releases should
now begin to take on more of a key role in influencing market movements this
week. With little data due out of the US, key figures from Europe and notably
China could add to market volatility this week. The Bank of England will make
an interest rate decision on Thursday and whilst rates are expected to remain
at their current levels, any increase would substantially strengthen the Pound
and could help Cable rebound after paring its gains last week following the
FOMC minutes. Furthermore Chinas dominance in the global economy means that any
positive data released from the country this week would also help strengthen
Cable as confidence around the world would be increased, stocks would
inevitably be buoyed and demand for safe havens such as the Greenback and Yen
would fall.

Please find
a summary of this week’s economic calendar below:

 

07.01.13

08:00 UK
Halifax House Prices

09:30 EU
Sentix Investor Confidence

10:00 EU
Producer Price Index

 

08.01.13

07:00 German
Trade Balance

10:00 EU
Consumer Confidence

10:00 EU
Retail Sales

10:00 EU
Unemployment Rate

11:00 German
Factory Orders

20:00 US
Consumer Credit Change

 

09.01.13

Chinese
Industrial Production

Chinese
Retail Sales

09:30 UK
Goods Trade Balance

10:00 EU GDP
Q4

11:00 German
Industrial Production

 

10.01.13

Chinese
Trade Balance

12:00 UK BoE
Interest Rate Decision

12:00 UK BoE
Asset Purchase Facility

13:30 ECB
Monetary Policy Statement

 

11.01.13

01:30
Chinese Consumer Price Index

09:30 UK
Manufacturing Production

09:30 UK
Industrial Production

13:30 US
Trade Balance

13:30 US
Import Price

15:00 UK
NIESR GDP Estimate

19:00 US
Monthly Budget Statement

 

Mark Webster