IronFX Daily Commentary by Charalambos Pissouros | 16/01/2017
January 16, 2017 9:27 am
Sterling collapses on anticipation of a “hard Brexit” speech • GBP opened with a huge downward gap, following media reports that PM May will probably deliver “hard Brexit” signals in a speech tomorrow. • Even though this is a negative development for the pound, we would stay careful of a “sell the rumor, buy the fact” reaction tomorrow. • If indeed she indicates the UK may leave the single market, it may lead only to a limited downside reaction in sterling (its already priced in!). • The surprise would now be some moderate comments from the PM, indicating a “soft Brexit”. That could lead to a significant rebound in GBP.
Today: • Speakers: BoE Governor Mark Carney and ECB Executive Board member Peter Praet.
As for the rest of the week: • Tue: UK PM Theresa May gives a speech on “Brexit”. Also, UK CPI data for Dec. • Wed: Bank of Canada rate decision. The BoC is exp. to remain on hold, focus will be on the tone of the statement. Also, a speech by Fed Chair Yellen on mon. policy. From the UK, jobs data for Nov., US CPI data for Dec., and New Zealand’s CPI for Q4. • Thur: ECB meeting. Exp. to stand pat. Overall tone may be dovish, which could prove EUR-negative. • Frid: Trump’s inauguration as US President. Reaction in USD will depend on whether (and how) he talks about fiscal and regulatory policies. Also, China’s GDP for Q4 and Canada’s CPI for Dec.
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Sterling collapses on anticipation of a “hard Brexit” speech
• GBP opened with a huge downward gap, following media reports that PM May will probably deliver “hard Brexit” signals in a speech tomorrow.
• Even though this is a negative development for the pound, we would stay careful of a “sell the rumor, buy the fact” reaction tomorrow.
• If indeed she indicates the UK may leave the single market, it may lead only to a limited downside reaction in sterling (its already priced in!).
• The surprise would now be some moderate comments from the PM, indicating a “soft Brexit”. That could lead to a significant rebound in GBP.
Today:
• Speakers: BoE Governor Mark Carney and ECB Executive Board member Peter Praet.
As for the rest of the week:
• Tue: UK PM Theresa May gives a speech on “Brexit”. Also, UK CPI data for Dec.
• Wed: Bank of Canada rate decision. The BoC is exp. to remain on hold, focus will be on the tone of the statement. Also, a speech by Fed Chair Yellen on mon. policy. From the UK, jobs data for Nov., US CPI data for Dec., and New Zealand’s CPI for Q4.
• Thur: ECB meeting. Exp. to stand pat. Overall tone may be dovish, which could prove EUR-negative.
• Frid: Trump’s inauguration as US President. Reaction in USD will depend on whether (and how) he talks about fiscal and regulatory policies. Also, China’s GDP for Q4 and Canada’s CPI for Dec.
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To get the latest Forex trading news you should:
• Download the IronFX Research app: http://goo.gl/jhQIxO
• Like us on Facebook: https://www.facebook.com/IronFX
• Follow us on Instagram: https://www.instagram.com/ironfx
• Follow us on LinkedIn: https://goo.gl/wSEbPN
• Follow us on Twitter: https://twitter.com/IronFXGlobal
• Circle us on Google+: https://www.google.com/+Ironfxglobal
• Subscribe to our Channel: http://bit.ly/1foFmCU
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