Looks like it is shaping up to be a huge end to the week with the markets keeping an eye on events in the US.

The EURUSD recovered some of the losses from earlier in the week. The pair opened at $1.12580 and fell to an opening-hour low of $1.12484. The euro turned it around, climbing to $1.12945 before falling to a near-session low of $1.12487. It then rallied to a high of $1.13093 in late trading, remaining near those levels for the rest of the session. It is currently trading at $1.12945. The GBPUSD fell again as Brexit uncertainty and weak economic data continues to rattle the UK. The pair began the session at $1.28424 and climbed in early trading to a high of $1.28773. Fortunes turned around for the pound as it declined throughout mid-session trading, dropping to a low of $1.27714. Late trading saw the pound climb slightly and is currently trading at $1.27951.

The Dow looked set for another strong session until some catastrophic economic data was released. Retail Sales posted a -1.2% contraction (vs 0.1% growth expected), while Core Retail Sales contracted by -1.8% (vs 0% expected). This was enough to send the Dow into negative territory. The index opened at 25,484.57 and rallied to a high of 25,617.09 mid-session. The release of this data saw the Dow plummet to a low of 25,303.91. It rebounded to 25,558.44 before falling once again. It is currently trading at 25,396.27. The Dax remains stuck in a malaise. If it opens much higher than its previous close, it trades flat. If it opens near its previous closing price, it turns negative, which is what happened here. The German index opened at 11,197.28 and rallied to an early high of 11,265.10. It was downhill from there as the Dax fell to a low of 11,072.44 a few hours later. It lifted itself from that low slightly before closing at 11,099.37.

The day ahead looks set to be an interesting one with news breaking that Donald Trump had signed the latest spending bill, avoiding a partial government shutdown. Accompanying that was the news that Trump looks set to also declare a national emergency in order to get the funding he needs to build his wall along the southern border shared by Mexico. This poses lots of questions – Can the President do this? Where will the funding come from and who loses out? Will this lead to domestic political instability? What will that instability mean for markets? Some feel that Trump has gone back on his promise of getting Mexico to build the wall, while he is also setting a dangerous precedent for declaring this a national emergency. On the other hand, some feel that the President is just trying to get on with the job of running the country but has been stymied at every turn, while his supporters want to see him fulfil his promise of building a wall. This national emergency declaration could end up in the courts as many object to the whole idea of a border wall and wish to stop its construction.

As for economic data being released today, this includes:

UK – Retail Sales

Canada – Foreign Securities Purchases

Japan – Revised Industrial Production

Europe – European & Italian Trade Balance

China – CPI, PPI, M2 Money Supply, New Loans

US – Empire State Manufacturing Index, Import Prices, Capacity Utilisation Rate, Industrial Production, Mortgage Delinquencies, TIC Long-Term Purchases, Prelim UoM Consumer Sentiment & Inflation Expectations

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