The Weekly Wrap – Britain Leaves the EU, amidst Optimism towards 2021

The Stats

It was a particularly quiet week on the economic calendar, in the week ending 1^st January.

A total of 15 stats were monitored, following 32 stats from the week prior.

Of the 15 stats, 7 came in ahead of forecasts, with 8 economic indicators coming up short of forecasts. There were no stats that were in line with forecasts in the week.

Looking at the numbers, 7 of the stats reflected an upward trend from previous figures. Of the remaining 8 stats, all 8 reflected a deterioration from the previous.

For the Greenback, it was back into the red to mark a 5^th weekly loss in 7-weeks. The Dollar Spot Index fell by 0.32% to end the week at 89.937. In the week prior, the Dollar had risen by 0.27% to 90.257.

Out of the U.S

It was a relatively busy week on the economic data front.

Key stats included November goods trade data, Chicago PMI, and weekly jobless claims figures.

In December, the Chicago PMI rose from 58.2 to 59.5, while the goods trade deficit widened from $80.42bn to $84.82bn.

Also positive was a fall in jobless claims figures. In the week ending 25^th December, U.S jobless claims fell back from 806k to 787k.

The jobless claims figures supported the U.S equity markets on the final day of the year.

Other stats included housing sector figures that also failed to move the dial.

In the equity markets, the S&P500 and Dow rose by 1.43% and by 1.35% respectively. The NASDAQ saw a more modest 0.65% gain in the week.

Out of the UK

It was a quiet week on the economic data front.

House price figures for December were the only stats from the UK in the week.

In spite of an uptick in house prices, the numbers had a muted impact on the Pound.

Support came from the Brexit deal and the House of Commons and House of Lords vote in favor of the Bill.

In the week, the Pound rose by 0.85% to $1.3672. In the week prior, the Pound had risen by 0.27% to $1.3560

The FTSE100 ended the week down by 0.64%, reversing a 0.27% loss from the previous week.

Out of the Eurozone

It was also a quiet week on the economic data front.

Key stats included job seeker figures from France and prelim December inflation figures from Spain.

Neither had an impact on the EUR, however, with optimism towards a 2021 economic recovery supporting the EUR.

The combination of a Brexit deal and the rollout of vaccines across the bloc were key drivers.

For the week, the EUR rose by 0.18% to $1.2215. In the week prior, the EUR had fallen by 0.52% to $1.2193.

For the European major indexes, it was a bullish week. The CAC40 and EuroStoxx600 rose by 0.53% and by 0.77% respectively, with the DAX30 gaining 0.97%.

For the Loonie

It was a particularly quiet week on the economic data front. There were no key stats from Canada to provide the Loonie with direction.

Optimism towards a 2021 economic recovery supported crude oil prices and the Loonie in the week.

U.S stimulus, monetary policy, and the rollout of the COVID-19 vaccines were positive for market risk appetite.

Private sector PMI numbers from China failed to impact, in spite of a marginal softening in private sector activity.

In the week ending 1^st January, the Loonie rose by 1.06% to C$1.2728. In the week prior, the Loonie had fallen by 0.60% to C$1.2865.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar, which reversed losses from the week prior.

In the week ending 1^st January, the Aussie Dollar rallied by 1.17% to $0.7694, with the Kiwi Dollar ending the week up by 1.00% to $0.7188.

For the Aussie Dollar

It was a particularly quiet week on the economic calendar.

There were no material stats from Australia to provide the Aussie Dollar with direction in the week.

The lack of stats left the Aussie Dollar in the hands of market risk sentiment.

COVID-19 vaccinations across key economies and expectation of further relief packages in the US drove demand for riskier assets. Commodity prices were also on the rise in the week as a result. The Bloomberg Commodity Index rose by 1.34% in the week.

For the Kiwi Dollar

It was also a particularly quiet week on the economic calendar.

There were no material stats from New Zealand to provide the Kiwi Dollar with direction.

The lack of stats left the Kiwi in the hands of market risk sentiment.

For the Japanese Yen

It was a relatively quiet week on the economic calendar. Prelim industrial production figures for November were in focus.

Following an impressive 4% rise in October, production stalled in November.

Impact on the Yen was limited, however, as Dollar support waned in the week.

The Japanese Yen rose by 0.22% to ¥103.20 against the U.S Dollar. In the week prior, the Yen had fallen by 0.13% to ¥103.43.

Out of China

Private sector PMIs for December were in focus late in the week.

On Thursday, the NBS Manufacturing PMI fell from 52.1 to 51.9, with the services PMI falling from 56.4 to 55.7. As a result, the Composite PMI fell from 55.7 to 55.1.

The impact on the markets was relatively muted with a number of key markets closed on the day.

In the week ending 1^st January, the Chinese Yuan rose by 0.22% to CNY6.5272. In the week prior, the Yuan had fallen by 0.03% to CNY6.5418.

The CSI300 rallied by 3.36%, with the Hang Seng ended the week up by 3.20%.