EUR/GBP Fundamental Analysis – December 23, 2015 – Forecast

Analysis and Recommendations:

The EUR/GBP is up 13 points at 0.7346 after German consumer climate reported higher than expected giving the euro a bit of a bump on this data light day ahead of the holiday.  The BoE is still expected to be the second big central bank to raise rates, but comments by policymakers this week put some distance between the US and the UK. Mark Carney, the governor, and Dame Nemat Shafik, one of his deputies, said there was no automatic link.

A research analyst at the currency house FXTM, said “sentiment towards sterling has also been eroded” partly by Dame Nemat’s comments. “With UK inflation rising at a tepid pace, the recurrent fears the Bank may push back raising rates deep into 2016 has reduced investor attraction to the pound. Sterling remains vulnerable and this should encourage sellers.”

In another apparently counter-intuitive move, the pound lost ground against the euro during yesterday’s session, in spite of the confusing and potentially divisive result from Spain’s weekend general election.

Spain’s Primera Liga is invariably a two horse race between footballing giants Barcelona and Real Madrid and the Iberian nation’s political scene has for decades followed the same pattern, with election results yielding a win for either the Socialist or the centre-right Popular Party.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, December 23, 2015

Government Bond Auctions

Date Time Country

Dec 23 17:30 Italy Announces details of CTZ on 29 Dec, plus BTP/CCTeus on 30 Dec

Dec 23 17:30 US Holds 2-year FRN auction

Dec 28 19:00 US Holds 2-year auction

Dec 29 11:10 Italy Auctions CTZ

Dec 29 n/a UK Announces details of Gilt auction on Jan 05 & 07

Dec 29 19:00 US Holds 5-year note auction

Dec 30 11:10 Italy Auctions BTPs/CCTeus

Dec 30 19:00 US Holds 7-year note auction