Category Archives: Market Insight

Markets Fragile Ahead of Easter as Pound Hits Low Against Euro
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Market Update: German Retail Sales, EU Confidence, and US Data in Focus

Today promises to be a busy day for markets, with key data releases from Germany, the EU, and the US set to drive sentiment and currency movements. Here’s what you need to know.

German Retail Sales Beat Expectations

This morning, German retail sales figures were released, showing a 0.6% monthly rise, surpassing expectations of a 1.9% decline. On a yearly basis, retail sales grew by 2.5%, further highlighting the resilience of Germany’s retail sector amid broader economic challenges.

EU Confidence and PPI Data Ahead

Later this morning, the focus will shift to the EU Business & Consumer Confidence Index, which will provide insight into economic sentiment across the Eurozone. This will be followed by the release of the Producer Price Index (PPI) numbers, offering further clues about inflation trends in the region.

Key US Data: ADP Employment and Petroleum Reports

This afternoon, attention turns to the US with two major releases:

  • The ADP National Employment Report, which estimates the monthly change in US employment excluding farming and government sectors.
  • The Weekly Petroleum Report, a key indicator for energy markets and inflation expectations.

US Dollar Strengthens Further

Over the past 24 hours, the US dollar has strengthened, supported by:

  • Above-consensus US economic data, confirming rising inflationary pressures.
  • Lowering odds of a Federal Reserve interest rate cut, with markets now expecting no cuts until at least July.

In the past 30 days, the dollar has gained:

  • 2.75% against the pound.
  • Nearly 3% against the euro.

This robust performance underscores the resilience of the US economy and its continued influence on global markets.

How Could This Impact Your Business?

The stronger dollar and mixed economic data across Europe present both risks and opportunities. Businesses should monitor these developments to optimise their international transactions and hedge against volatility.

Speak to Qumoney’s experts today for tailored strategies to safeguard your business and capitalise on market movements.

Pound Lags as Tariff Fears Return Despite UK GDP Surprise
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Market Focus: Key PMI and Inflation Data in the Spotlight

This week kicks off with a focus on PMI figures from the EU, Germany, and France, alongside key inflation and employment updates. Here’s what you need to know about today’s market events and their potential impact.

EU PMI Figures in Focus

Later this morning, the EU, Germany, and France will release their PMI figures, which are expected to come in stronger than last month. If these expectations are met, the data could provide a much-needed boost to the euro, offering temporary support amid ongoing market pressures.

German Inflation Data to Be Released

This afternoon, attention shifts to German CPI figures, with forecasts suggesting that inflation will tick higher for December. The outcome will be closely watched as it could influence the European Central Bank’s (ECB) policy stance ahead of Thursday’s ECB Economic Bulletin, which is expected to reinforce the need for further interest rate cuts.

US Data: Factory Orders and Job Gains

The US Factory Orders report is due late this afternoon and will add to the picture of the US economy’s resilience. Later in the week, markets will turn their attention to Friday’s employment figures, where job gains are expected to remain elevated for December. This ongoing strength supports the narrative of a robust US economy, further bolstering the US dollar.

UK Data: A Quiet Week

It’s a relatively quiet week for UK data, with the Housing Index numbers set to be released tomorrow. With little to drive sterling from the UK side, markets are likely to remain focused on developments in the EU and US.

Currency Outlook

  • The euro edged slightly higher last week, supported by strong Spanish inflation data.
  • The US dollar continues to show strength, reflecting the ongoing economic recovery in the United States.

Businesses trading internationally should remain vigilant as this week’s data could drive currency fluctuations.

How Could This Impact Your Business?

Market volatility tied to PMI figures, inflation data, and employment reports presents opportunities to hedge risks and capitalise on favourable exchange rates.

Contact Qumoney’s experts today for tailored advice to help your business navigate currency markets and protect your financial strategy.

Market Update: Pound Gains as Key Economic Events Approach
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Market Update: US Data Boosts Dollar as PMI Revisions Weigh on Europe and UK

Recent economic data underscores the evolving dynamics of global markets, with the US dollar strengthening on the back of positive surprises and a favourable economic outlook.

US Jobless Claims Hit 8-Month Low

The latest US weekly initial jobless claims fell to an eight-month low of 211k, outperforming the forecasted 222k. While seasonality may have influenced the data, it highlights the resilience of the US labour market.

Additionally, the US manufacturing PMI was revised higher for December, contrasting with downward revisions for both the Eurozone and UK PMIs, which remain in contraction territory.

Dollar Dominates Currency Markets

The US dollar strengthened significantly yesterday:

  • Rising 0.8% against the euro.
  • Gaining more than 1% against sterling.

This surge was driven by better-than-expected US data, a stronger GDP outlook, and optimism surrounding the potential policy mix of the Trump administration. These factors have reinforced confidence in the dollar, putting pressure on other major currencies.

What to Watch Today

Markets are now focused on the US manufacturing ISM for December, a key release that could further influence sentiment and currency movements. Meanwhile, remarks by ECB Chief Economist Philip Lane are expected to provide insights into the Eurozone’s economic trajectory and policy direction.

How Could This Impact Your Business?

The stronger dollar and diverging economic conditions highlight the importance of staying informed. Whether you’re managing international payments or navigating currency risks, understanding these trends is essential.

Contact Qumoney’s experts today to discuss tailored strategies to safeguard your business and capitalise on market opportunities.

UK house prices rise, ECB interest rate cut, GBP/USD at 9-month low
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UK House Prices Rise as Market Dynamics Shift

The latest Nationwide House Price Index reveals a 0.7% increase in UK house prices for December, significantly exceeding the forecasted 0.1%. For the year 2024, UK house prices rose by an impressive 4.7% year-on-year, reflecting renewed strength in the housing market.

Key Drivers Behind the Surge

Several factors contributed to this unexpected jump in house prices:

  • A marginal drop in the headline interest rate.
  • Improved buyer sentiment, fuelled by slowing inflation.

This combination has bolstered demand, driving price growth even as economic uncertainties persist.

Euro Under Pressure as ECB Outlook Weakens

The euro remains under pressure against both the pound and the dollar as the new year begins. Market sentiment reflects expectations of an ECB interest rate cut later this month, further weighing on the euro’s performance in currency markets.

GBP/USD Hits 9-Month Low

As the Bank of England signals a potentially more aggressive approach to interest rate cuts compared to the Federal Reserve, the GBP/USD currency pair is trading at a 9-month low. This divergence in monetary policy outlooks is creating headwinds for the pound, underscoring the challenges ahead for sterling in 2025.

How Could This Impact Your Business?

With fluctuating house prices and diverging monetary policies, businesses need to stay informed and agile. Whether you’re managing currency exposure or navigating the real estate market, preparation is key.

Contact Qumoney’s experts today to explore strategies for capitalising on market opportunities and protecting your financial position as we head into 2025.

Market Update: Quiet Markets as Focus Shifts to PMI Releases
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Market Outlook: Modest Volatility Amid Limited Economic Data

With the New Year holiday limiting economic data releases, market movements are expected to remain flat, and volatility is likely to be modest. However, ongoing developments in the eurozone, UK, and US are keeping investors on alert.

Euro Declines as Interest Rate Concerns Mount

The euro weakened on Friday against major rivals, marking its fourth consecutive weekly decline. This drop follows concerns over a widening US-eurozone interest rate differential, compounded by cautious remarks from ECB President Christine Lagarde.

Lagarde’s comments have increased the probability of a 0.25% ECB rate hike in January, rising from 55% to 65%, signalling a more cautious approach to monetary policy in the eurozone.

Pound Under Pressure Against the Dollar

The GBP/USD currency pair continues to struggle amid:

  • Flat UK GDP growth in Q3.
  • Mixed retail sales data.
  • Rising public sector borrowing.

These factors, coupled with a strong US dollar, have placed the pound under sustained negative pressure. Without significant changes in economic data or market sentiment, this trend is expected to persist.

Key Takeaway for Businesses

With the euro’s decline and the pound facing headwinds, businesses involved in international trade should stay vigilant. Modest volatility may still present opportunities to hedge currency risks or lock in favourable rates.

Speak to Qumoney’s experts today to explore strategies tailored to your needs, ensuring your business is prepared as markets evolve into 2025.

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