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Published on 10 Feb 2017
US
President Donald has enforced some positivity into the markets this
Friday with talk of ‘big-league’ tax reforms, which means hopes are now
high for corporate tax cuts, deregulation and government spending
galore! Daily FX analyst Oliver Morrison joins Katie Pilbeam in the
studio to discuss all of the themes for the week ahead which include
European political uncertainty and a whole raft of UK data including
unemployment numbers as well as CPI and PPI data.
Oliver
believes that markets were really craving direction this week with gold
climbing, bond spreading and thus there was a lot of concern about
political trauma and that looming existential crisis in in Europe and
Greek debt – but the Trump trade/the reflation trade/ is back in play.
In typical Trump style, it was a bombastic announcement committing to
tax reform but lacking in detail. He has basically promised a major tax
announcement in the next 2 or 3 weeks. As a result, we’ve seen a rise in
risk appetite.
These concerns stem from the latest polls
showing that German Chancellor Angela Merkel is falling behind a
candidate from the country's Social Democrats in this year's elections
scheduled to take place in September. Plus, over in France Marine Le
Pen, who has vowed to pull France out of the euro zone, is gaining
ground.
In terms of UK data, it definitely continues to defy
those Brexit fears. There was some positive manufacturing data out
Friday morning which points towards the economy ‘firing on all
cylinders’ but Sterling hasn’t jumped up in response but remains
reasonably stable.
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