Busy week ahead as government shutdown continues

January 7, 2019

Plenty of data set for release this week as political gridlock causes uncertainty in the US.

The EUR/USD remained flat for most of the session, with a three-hour window mid-session providing the only semblance of volatility. The pair opened at $1.13911 and climbed slowly throughout early-session, peaking at $1.14181. The euro then tumbled to lows of $1.13444 a few hours later before bouncing back just as quick to reach a near-session high of $1.14167. It remained steady for the rest of the session and is currently trading at $1.14084. The GBP/USD fared much better than the euro after opening the session at $1.26229. The pair dipped to a low of $1.26126 early and remained flat during the first half of the day. Late-session trading saw the pound rally to a high of $1.27439. It is not far off that high, currently trading at $1.27278.

The Dow went off to the races on Friday, on the back of strong jobs data and the Fed Reserve hinting at a less aggressive path to interest rate normalisation. The index opened at 22,705.63 and fell to lows of 22577.54 early. The Dow rallied off those lows, climbing for most of the day. Late-session trading saw the Dow surge to a high of 23,518.78. It is currently trading at 23,463.20. The Dax was pulled up by the Dow, in one of its strongest sessions of recent memory. The German index opened at 10,524.55 and dipped to lows of 10,482.60 early. It rallied from that point to peak at 10,835.00 before closing at 10,823.00.

The week ahead contains plenty of data releases, but it is geo-political issues that will be at the forefront. The US government remains in partial shutdown, with both sides of politics not being able to agree on a funding package to re-open the closed sections of the government. The longer this drags out, the more uncertainty that brings to the US economy.

The data being published today and the most significant this week includes:

Today – US ISM Non-Manufacturing PMI, Canadian Ivey PMI, German Retail Sales and Factory Orders, European Retail Sales and Sentix Investor Confidence, Swiss Foreign Currency Reserves

Tuesday – Canadian Trade Balance

Wednesday – BoC Overnight Rate, Monetary Policy Report, Rate Statement and Press Conference

Thursday – BoE Governor Mark Carney speaks, FOMC Meeting Minutes

Friday – Australian Retail Sales, UK GDP and Manufacturing Production, US CPI and Core CPI, Fed Chair Jerome Powell speaks


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