Market Overview:
It has been a quiet start to the week as US markets were closed Monday to mark Martin Luther King Day. CPI data for the US released Friday, showed that although headline inflation data was below market expectations, increasing by 0.1%, after a 0.4% increase in November and under economists’ estimates of 0.2% for the month, the core inflation rate was stronger than forecast increasing 0.3% on the month. US retail sales data for the December period increased, also released on Friday, printed in line with expectations coming in up 0.4% following an upward revision of 0.9% for the November figures. Friday’s inflation data should underscore the view that the Fed will continue to normalise interest rates over the course of 2018. The EUR surged higher as news emerged that German Chancellor Angela Merkel is likely going to be able to form a ‘grand collation’, with the SDP solidifying her position. The SDP has to has to approve the deal at a special party conference but the removal of the risk of another election saw buyers pile into the EUR. On the local scene there has been little in the way of data this week, but there is another Global Dairy auction on Wednesday morning with farmers looking for another rise to build on the previous hike in prices at the last auction. Read more