EUR/GBP Fundamental Analysis December 18, 2014 Forecast

Analysis and Recommendations:

The EUR/GBP eased by 10 points as the euro weakened today along with the pound. The pound fell on a lackluster claimant count report while the euro responded to a CPI print at just 0.3%. The pair are holding at 0.7934. p ECB officials have sent strong signals in recent weeks that the central bank may embark on quantitative easing as soon as its Jan. 22 policy meeting. The ECB intends to raise the size of its balance sheet–the value of assets it holds–to around EUR3 trillion, implying a EUR1 trillion increase from current levels.

Many analysts doubt the current measures will get it that far, and ECB President Mario Draghi said on Dec. 4 that officials will reassess their programs in early 2015. The ECB’s challenge is complicated by the recent plunge in oil prices, which is expected to pull annual inflation–which was 0.3% last month in the Eurozone–even further below the bank’s 2% target.

Manufacturing and services in the 18-nation euro area barely expanded in December as sluggish growth in Germany and France kept business activity subdued.

Markit Economics said a composite index for manufacturing and services rose to 51.7 from 51.1 in November, just above the 51.5 level forecast by economists in a Bloomberg survey. A reading exceeding 50 indicates expansion. A factory gauge increased to 50.8 from 50.1, while a measure for services rose to 51.9 from 51.1.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Thursday, December 18^th

Government Bond Auction

Date Time Country Auction

Dec 17 12:00 Greece Eur 1bn 3M T-bills (Mar 2015)

Dec 18 11:30 Spain Bono/Obligacion auction

Dec 18 12:00 Ireland Auctions T-bills

Dec 18 18:00 US Announces 2-yr FRN, plus 2/5/7 yr Notes

Dec 18 20:00 US Auctions 5-yr TIPS

Dec 19 13:00 Norway Publishes 2015 supply calendar

Dec 22 18:30 Italy Announces details of BOT/CTZ auctions on Dec 29

Dec 22 20:00 US Auctions 2-yr Notes

Dec 23 18:30 Italy Announces details of BTP/CCTeu auctions on Dec 30

Dec 23 20:00 US Auctions 2-yr FRN, plus 5-yr Notes

Dec 24 20:00 US Auctions 7-yr Not