EUR/GBP Fundamental Analysis – January 11, 2016 – Forecast

Analysis and Recommendations:

The EUR/GBP dipped 44 points to close out the week near the 0.7436 level after the euro gave back a lot of its gains while the pound traded flat showing little response to the trade balance data released today. A drop in German industrial production weighed more heavily on the markets.  Germany’s stats office said on Friday that exports grew by 0.4 per cent compared to October, from a decline of 1.3 per cent recorded in the previous month. That was a nose below forecasts for a 0.5 per cent rise. Imports, meanwhile, grew by 1.6 per cent, from a decline of 3.2 per cent, outstripping forecasts for 1 per cent growth.

The UK’s November’s trade data show that sterling’s appreciation over the last two years is continuing to slow the economic recovery. The narrowing of the trade deficit entirely reflected a shrinking of the trade in oil deficit to £0.6B, from £1.1B in October, due to lower oil prices. Exports are still struggling, with goods volumes rising by just 0.6% month-to-month despite falling by 2.6% in October. What’s more, in October and November combined, the volume of goods exports was just 0.6% higher than in Q3, compared to a 2.5% surge in imports over the same period. As a result, net trade looks set to subtract about 0.5 percentage points from quarter-on-quarter GDP growth in Q4, assuming no erratic movements in December.

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:

Monday, January 11, 2016

Government Bond Auctions

Date Time and Country

Jan 12 11:00 Austria Holds bond auction

Jan 12 11:00 Netherlands Euro 1-1.5bn 2.5% 2033 DSL

Jan 12 11:30 UK 0.125% 2046 Inflation-linked Gilt

Jan 12 n/a UK Announces details of Gilt auction on Jan 20

Jan 12 19:00 US Holds 3-year note auction

Jan 13 11:05 Norway Holds bond auction

Jan 13 11:10 Italy Holds BTP

Jan 13 11:30 Germany Euro 5bn Feb 2026 Bund

Jan 13 19:00 US Holds 10-year note auction

Jan 14 10:30 Spain Auctions Bonos/Obligaciones

Jan 14 19:00 US Holds 30-year bond auction

Jan 14 N/A US Announces details of 10-yr TIPS auction on Jan 21

Jan 18 11:00 Belgium Holds OLO auction