Until yesterday, virtually all the world held their breath, watching the growing tension on the US-Iran line. Fortunately, the worst fears were not confirmed and everything seems to indicate that in the near future we will deal with the de-escalation of the conflict. Peace returned to the markets.
There will be no war
Yesterday the whole world could finally breathe a sigh of relief. A statement made by President Donald Trump after the Iranian rocket fire of American bases in Iraq (in response to the killing of Americans by General Kasem Suleimani) indicates that the conflict should not escalate in the near future. Trump began his speech by saying that "until Iran is president, Iran will not obtain nuclear weapons." He confirmed that neither American nor Iraqi suffered in the attack. He accused Iran of sponsoring terrorism and called on world powers to withdraw from the nuclear agreement with that country in order to create new solutions that would actually stop Ayatollahs from creating nuclear weapons. He emphasized that the fact that the US has great military equipment does not mean that the United States are to use it, and the mere fact of American power, both military and economic, is enough to scare off enemies. By commentators, these words were considered a signal of a desire to alleviate the conflict. The White House tenant also intends to ask NATO (JK:NATO) for greater involvement in the Middle East. After Trump's statement, the price of oil went down, previously strongly rising in the face of uncertainty about developments in this sensitive region of the world.
Lower rates in the UK?
The pound exchange rate today reacted with a clear decline (by 2 grosze to 12:30) on the speech of the President of the Bank of England Mark Carney. He stated that the British regulator does not rule out interest rate cuts if the island economy were to remain weaker in the long run, as indicated by many economic analyzes. Brexit is obviously the main cause of this weakness. Lower rates would reduce credit costs and could thus help the cooling economy. For now, the market gives a 60% chance of cutting rates by 0.25% by the end of the year. The currency market reacted to this statement immediately and today the pound sterling is clearly weakening against all major currencies.
Data from Europe
We have received several important macroeconomic readings from Europe today. Although it's hard to talk about any big surprises, it's still worth bending over for a moment. First, German Destatis announced November industrial production behind the Oder. A 1.1% increase is positive news because the forecasts were about 0.7% in progress, and this is also the best result since July 2018 and finally in the black after two months of decline. However, it seems that the markets were not particularly interested in this topic and it was difficult to notice the impact of these data on the euro exchange rate. Another important lecture (also in November) concerned the Eurostat publication on unemployment in Europe. For the euro area, this ratio stood at 7.5%, and for all 28 EU countries it stood at 6.3%. Because it was consistent with the forecasts and identical to the last reading, it is worth delving into the details. A repetitive 7.5% in eurozone remains the best result since July 2008, and 6.3% for the entire Community (also equalizing the previous reading) is the lowest since 2000, which is since the introduction of the monthly publication of the unemployment rate in the Union. According to Eurostat methodology, we have the lowest unemployment in Czech Republic (2.2%), Germany (3.1%) and Poland (3.2%). However, the most unemployed can be found in southern Europe, i.e. in Italy (9.7%), Spain (14.1%) and Greece (16.8%).
There are no important readings in the macroeconomic data calendar today.