Poor UK retail sales data and lower consumer confidence weighs on the pound. US equities continue to sell off
January 21, 2022
GBP/USD 1.3568 GBP/EUR 1.1970 EUR/USD 1.1335 USD/CAD 1.2527 EUR/CHF 1.03598 EUR/SEK 10.3988 EUR/NOK 10.0172 EUR/DKK 7.4426 USD/ILS 3.1414 AUD/USD 0.7190 NZD/USD 0.6716 USD/SGD 1.3459 USD/JPY 113.96 USD/CNH 6.3457 USD/INR 74.44 EUR/ILS 3.5623 GBP/ILS 4.2624 USD/ZAR 15.1779
GBPMore pressure on GBP with good selling seen post London closing last night. GBPUSD reached highs of 1.3662 at the end of the London session before dipping to trade at 1.3562 as we print, down 0.87% this week.
Poor UK retail sales data out this morning confirms that the recent spread of the omicron variant has kept shoppers at home. Retail sales fell 3.7% from November, the largest drop since January's 2020 lockdown - this was much lower than the anticipated 0.6% decline. While restrictions have since been lifted, there are continued concerns higher inflation, interest rates and taxes will squeeze consumer incomes in 2022, reducing their spending power.
UK consumer confidence also plunges to levels not seen since early pandemic, as rising living costs and inflation took over from the pandemic as a prime concern. Households are bracing for a big hit in April, when energy bills may rise by 50% and the new national insurance contribution kicks in.
The FTSE dipped 0.06% over yesterday's session.EUREuropean shares rallied over yesterday's trading session with the Euro Stoxx, CAC and DAX gaining 0.73%, 0.3% and 0.65% respectively.
EURUSD retreated further over yesterday's trading however recovered some ground during the Asia session. EURUSD sits in the 1.1335 region as we print down 0.69% this week. EURGBP has gained over the US and Asia sessions to trade in the 0.8354 region as we print, reversing some of this weeks earlier losses to trade up 0.1% this week.
France will relax some restrictions from next month whilst daily cases in Germany hit another record level.USDBonds rallied pushing the 10-year treasury yield below 1.8%. The dollar rallied into US session however eased slightly into Asia and London session with the Bloomberg dollar index trading up 0.53% so far this week.
Yet, another post Europe close US sell off in the equity space with the Dow Jones, S&P and NASDAQ dipping 0.89%, 1.1% and 1.3% respectively.
In the latest US data, jobless claims reached a three-month high, suggesting the omicron variant may be having a bigger impact on the labor market. Initial jobless claims came in at 286k, above the surveyed 225k.
The Fed opens a debate over possible digital currency.ASIA/PACIFICRising infections spark Covid super spreader fears in Hong Kong.
Asian stocks followed the US to further decline, with the Nikkei, Hang Seng and CSI falling 0.9%, 0.15% and 0.92% respectively as we print. Bitcoin weakened, falling below the $40,000 level. Oil eases off 2014 high with modest U.S. crude supply increase - the White House also said it can work to accelerate the release of strategic reserves.ILSUSDILS was mixed over yesterday's London session, however gained in US hours and now sits in the 3.1430 region up 1.24% this week.Data & EventsUK - retail sales, BoE’s Mann speak
Eurozone - ECB’s Lagarde speaks, Consumer confidence
Canada - retail sales
Italy - Bank of Italy releases quarterly economic bulletin
US - leading index
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