A notably weaker than expected US ISM manufacturing release reinforced growth fears.

A notably weaker than expected US ISM manufacturing release reinforced growth fears and offset a strong headline ADP employment number.

US 10-year yields declined to 11-month lows and the dollar overall lost ground with increased speculation over a Fed funds rate cut undermining sentiment.

Wall Street indices also declined sharply as technology stocks were sold, although sentiment improved on Friday with equities and risk assets recovering some ground while the yen retreated.
Gold advanced to a fresh 6-month high with silver also making net gains.

There was choppy trading in crude with net gains as global risk appetite improved.

The UK PMI construction index declined to a 3-month low of 52.8 for December from 53.4 previously and marginally below consensus forecasts. There was, however, an improvement in business confidence to 8-month highs amid optimism over infrastructure projects. Markets remained wary over the overall economic outlook given political uncertainty.

Global risk conditions had an important impact during the day with Sterling gaining some support as markets stabilised and risk assets recovered some stability. German Chancellor Merkel and Irish Prime Minister Varadkar reiterated that the Brexit withdrawal deal would not be changed, although they also pledged to offer reassurances and guarantees where possible.

GBP/EUR was unable to get back above 1.1100 having fallen to the 1.10990 area intraday while GBP/USD moved back above 1.2600 and the UK currency edged stronger on Friday as risk conditions improved slightly.

Economic Calendar

Expected Previous
07:00 GBP Nationwide House Prices (Y/Y)(DEC, 2018) 1.50% 1.90%
07:00 GBP Nationwide House Prices (M/M)(DEC, 2018) 0.10% 0.30%
08:50 Markit Serv PMI(DEC, 2018) 49.6 49.6
08:55 EUR German PMI Composite(DEC, 2018) 52.2 52.2
08:55 EUR German PMI Services(DEC, 2018) 52.5 52.5
08:55 German Unemployment Change(M/M)(DEC, 2018) -11K -16K
08:55 German Unemployment Rate(M/M)(DEC, 2018) 5.00% 5.00%
09:00 Euro-Zone PMI Composite(DEC, 2018) 51.3 51.3
09:00 Euro-Zone PMI Services(DEC, 2018) 51.4 51.4
09:30 GBP PMI Services(DEC, 2018) 50.8 50.4
10:00 Euro-Zone CPI (Y/Y)(DEC, 2018) 1.90% 1.90%
10:00 Euro-Zone Core CPI (Y/Y)(NOV 08, 2018) 1.00% 1.00%
13:30 USD Average Hourly Earnings (M/M)(DEC, 2018) 0.30% 0.20%
13:30 USD Private Nonfarm Payrolls (DEC, 2018) 175K 161K
13:30 USD Non-farm Payrolls(M/M)(DEC, 2018) 175K 155K
13:30 USD Labor Force Participation Rate(DEC, 2018) - 62.9
13:30 United States Unemployment Rate(M/M)(DEC, 2018) 3.70% 3.70%
13:30 CAD Employment Change (M/M)(DEC, 2018) 5.5K 94.1K
13:30 CAD Full Employment Change(DEC, 2018) - 89.9K
13:30 CAD RMPI (M/M)(NOV, 2018) - -2.40%
13:30 CAD Unemployment Rate (M/M)(DEC, 2018) 5.70% 5.60%
14:45 USD Markit PMI Composite(DEC, 2018) 54.7 54.7
14:45 USD Markit Services PMI(DEC, 2018) 53.4 53.4
15:15 USD FOMC Member Powell Speech - -
15:15 FOMC Member Raphael Bostic speech - -
16:00 USD Crude Oil Inventories -2.333M -0.046M
18:00 USD Baker Hughes US Oil Count - 885

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.