Good Morning,

USD: Shutdown moves into 3rd day

US politicians were not able to put together a deal to secure funding for the US government on Friday night and, without an operating budget, the Federal government is currently in a state of shutdown. Another vote has been called for today but there is little to guarantee that a decision and agreement will be forthcoming.

Dollar slipped as the markets opened up last night in Asia but since then the moves have become very subdued.

EUR: Politics working in its favour

The first part of the week will likely be dominated by German politics as the SPD held a conference vote yesterday which signalled a greenlight for coalition talks with Angela Merkel. Both parties will prepare for talks to begin on Tuesday. The euro rose during the Asian session upon this news as it adds certainty to the EU’s powerhouse economy.

We have the Euro Group meeting today where finance ministers across the Eurozone will gather to discuss the health of the region. Mario Draghi will also be in attendance ahead of his main act on Thursday at the ECB’s interest rate meeting. The main focus will be to discuss Greece and the next allocation of bailout funds. They have made good progress over the recent months to improve their public finances. The finance ministers will review this and determine if Greece will receive the next tranche of bailout funds.

GBP: Retail sales unable to boost sterling

Just to recap on the UK’s December retail figure release from Friday morning, which saw the worst performance since 2010. Black Friday was finally imported into the UK retail atmosphere in 2013 by Asda so today’s poor numbers are much more a story of consumption demand being dragged into November than it is about pressures on the UK consumer.

Of course, the economics of the UK are not helpful to the average consumer; real wages are still negative, business confidence and therefore the propensity to employ or bring wages higher is lacking and investment is weak. The changing retail landscape is largely to blame for these numbers but the underlying foundations of the High St are still poor.

This initially knocked GBPUSD lower, but with the US Government shut-down acting as a counter threat, the market was able to notch out a new high of 1.3945.

ZAR: How long does Zuma have left?

Rand is stronger on the session so far on news that the ANC party will finally oust President Zuma and replace him with the elected leader Cyril Ramaphosa.

Have a great day