Afternoon Market Update – 13/12/2016 – by Jaz Singh

We’ve had a plethora of data this morning, the most important of which was UK price index figures. The results were mixed with half of the data points coming in worse than expected. This did little to change the bullish trend we’ve seen in sterling over the past few days as we find cable above the 1.27 handle once again. After its considerable sell off from the 1.50 handle in the wake of Brexit it seems that year end short covering is taking precedence, especially with dollar being extremely strong since Trump’s election. With the FOMC statement and press conference tomorrow we can expect Yellen to dampen down inflationary expectations for next year, giving further stimulus to the long cable trade. Elsewhere we’ve seen the yen continue its declines, weakening 0.3 percent versus the dollar. In the equity space we see European bourses positive across the board, taking the lead from the Asian session. The DAX has broken through resistance seen at 11250 while the Stoxx Europe 600 is up 0.8 percent. Crude oil is in positive territory today as markets gain confidence in OPEC’s ability to stick to their plans for an output cut. This afternoon we have price index data from the US as the highlight on the calendar.