Market Review – Fundamental Perspective 8 January 2018

Global equity markets rallied last week during the first week of trading of 2018. US and European indices gained around 2% after economic data provided more evidence that the ongoing economic expansion is still strong and widespread.
US nonfarm payrolls came in below consensus last Friday at 148k (consensus: 190k) due to weakness in the retail sector. USD initially fell on the release in response to the headline number but it recovered later in the afternoon as the remainder of the report was relatively strong.
GBP traded in a tight range against USD and EUR last week and Brexit negotiations have taken a step back from the news headlines for now. Talk of a cabinet reshuffle by PM May starting today was the main focus over the weekend and this week is expected to be relatively quiet amid a light events/data calendar.
GBPUSD support comes in at 1.3500 ahead of 1.3300 with resistance in the 1.3615-60 area. In EURGBP, 0.8700-0.8900 is the broader range.
Preliminary Grand Coalition talks in Germany begin today where the CDU and the SPD will try to iron out differences on fifteen key themes such as migration and EU policy. The SPD will hold a conference on 21 January to decide if the preliminary talks justify the beginning of formal talks or if an attempt to join forces with CDU should be abandoned.
US CPI (Friday) and the ECB minutes from its December meeting (Thursday) will be in focus this week in an otherwise light event and data calendar.
In emerging markets, we get inflation data in India (Friday) and the ANC’s National Executive Committee meeting (Wednesday) but the market reactions to these events are likely to be contained to local markets.

PCM Enterprise - Development Firms Review