After three sessions during which global risk appetite (and Sterling) shone and the Euro tanked, it has been a quieter 24 hours in financial markets. The S&P 500 closed down 0.2% yesterday and is currently trading flat while the GBP/USD, EUR/USD, AUD/USD and NZD/USD crosses have done little around 1.304, 1.08, 0.67 and 0.644, respectively.
The fact that key macro data have come broadly in line with expectations may have contributed to markets taking a breather, for now at least. US CPI-inflation, retail sales and industrial output figures were all in line with analysts’ expectations and will have done little to change the Fed’s underlying view that the US economy is currently in a good place and policy rates are appropriate. Eurozone GDP growth was a paltry 0.1% qoq in Q4 but the bar had been set low. Incidentally GDP growth in both the UK and Germany ground to a halt in Q4. Policy-makers will be hoping for a recovery in Q1…
