Summary:

• The Pound is falling back today after a retail sales dropped sharply in Dec
• The USD and US stocks are gaining despite another Uni Mich miss
• CAD falls lower despite positive manufacturing data
• Bitcoin and other crypto markets experience subdued trade
• German coalition talks wrangle on

One of the biggest movers today has been the pound with the GBPUSD rate earlier hitting an 18-month high before falling back below the 1.39 handle. The decline came after the worst drop in retail sales since the aftermath of the EU referendum in June 2016 and especially when you consider that the data was for December – a month that typically has favourable seasonality effects due to the fesitve period – it is especially worrying. 

Across the pond there was also sum below par economic data with the University of Michigan consumer sentiment missing forecasts for the 3rd time in a row. The reading for the month of January of 94.4 was a fair size miss on the 97.0 expected. Furthermore the previous reading was subject to a notable revision lower, not standing at 95.9 compared to 96.8 previously.

It wasn’t all doom and gloom on the data front today with some upbeat news coming from Canada. The manufacturing sales figures for November showed a faster than expected rise of 3.4% against consensus forecasts for 1.9% and a marked increase on the prior reading of -0.6% (revised lower from -0.4% previously.) 

A week that began in a wild fashion has petered out somewhat for cryptocurrencies with today’s trade being the most subdued of the lot. There was large declines seen early on this week but the last two days have seen a pause in the selling. The question now is whether the declines are over and price will recover or whether this is a temporary stay of execution before another precipitous drop. The coming days could well hold the answer. 

 The DE30 has enjoyed a strong end to the week having risen firmly today by more than 1%. The market remains susceptible to a political shock with 600 SPD delegates voting on Sunday over the proposition of party leaders to begin formal talks with Angela Merkel’s CDU.