Markets gear up for a bumper day of fundamental releases which are likely to shake up sleepy markets, giving direction in a period of consolidation.
Out of the US we have the president elect Donald Trump giving a press conference later in the day. Markets have enjoyed the election of trump as we have seen his good for business sentiment prop up the US economy with the USD, US equities and global equities enjoying fresh multiyear and all-time highs. Markets will watch the speech for signs of a continued optimism by Trump, with comments confirming his initial stance likely to see a fresh continuation of the market moves. However, should he pull back from his optimism, we would see markets reverse aggressively as the relatively overbought assets do an about face turn on aggressive profit taking and bargain selling.
Out of the UK we have the Manufacturing Production m/m figure, expected at 0.6%, and the comments out of BOE`s Carney to look forward to in a difficult time for the UK economy which has seen the GBP slide aggressively in recent trade. Manufacturing is a key industry for the UK and growth here would see the GBP appreciate while a dismaying figure will see the GBP continue to depreciate below the 1.2000 level. Carneys speech will be of paramount importance as we suspect he will use the opportunity to try and change sentiment after markets aggressively sold the GBP in the wake of a gloomy speech by PM May, who gave the impression that the UK was in for a hard Brexit. Should Carney reassure markets of a smooth transition, we would see the GBP bounce back towards the 1.2500 level as investors unwind positons in hopes of more clarity regarding the divorce procedures. However, should he fail to convince markets of a smooth transitions, we would see the demise of the GBP continue as sellers make their way to the much touted 1.1800 level.