- GBP starts the week on a soft tone
- Friday’s US Non Farm Payroll report was slightly softer than expected but provided no big surprises
- Markets focus on Donald Trump’s press conference on Wednesday
Sterling has started the week on a soft tone following Theresa May’s comments over the weekend, which have been viewed as her reverting back towards a ‘Hard Brexit’ tone, with immigration seemingly taking priority over membership to the single market
- GBPUSD has broken below trend line support at 1.2225 and recent 1.2200 support. Our traders see 1.2083 as the next target support level, the post flash crash low, followed by 1.2000
Friday’s US employment report for December provided no big surprises
- Nonfarm payrolls expanded 156k in December, below consensus expectations (175k), whilst the unemployment rate ticked higher to 4.7%. However, average hourly earnings jumped higher, rising 0.4% m/m
- Overall, the report was slightly softer than anticipated though the slowing of employment growth in the second half of 2016 is consistent with late-cycle behaviour of the US labour market. In the near term, we expect Trump’s proposed aggressive fiscal stimulus this year to offset recession risk, effectively extending the cycle
This week, US politics are likely to be the main market driver. Investors will pay attention to President-elect Trump’s press conference scheduled for Wednesday. In addition, the confirmation hearings for different cabinet members begins
via Barclays
Todays’ currency rates
GBPUSD = 1.2178 |
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GBPEUR = 1.1548 |
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EURUSD = 1.0546 |
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GBPAUD = 1.6636 |
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EURGBP = 0.8660 |