Market insights

Will The UK Form Closer Ties With The EU

This convention is already in place between Europe and North Africa to allow tariff free movement of certain goods.

The economic forum in Davos is happening this week, and the EU trade chief, Maros Sefcovic, has indicated he would be open to discussions with the UK around the subject.

Whilst the news isn't having an immediate impact on Pound rates, future moves by the Government to move back towards closer ties with the EU could well affect GBP/EUR.

At the moment Sterling is still moving in a more or less sideways pattern.

And with little scheduled news in the next 24 hours it's unlikely that will change.

There is a UK consumer confidence reading at midnight which has historically sometimes affected Pound rates.

The real highlights in the next 24 hours could be the Canadian Dollar and the Japanese Yen.

Canadian retail sales numbers are out after lunch and the Bank of Japan interest rate decision is out in the early hours of Friday.

Interestingly the move by the BoJ from a negative interest rate to a positive rate in 2024 had a profound impact on global stock markets.

This time around a 25 point increase to 0.5% looks to be priced in, so it will be a very closely followed number by equity traders.

Business news covers the Davos forum in more detail, and there's also moves by more UK supermarkets to support UK farmers in their fight against the Government inheritance tax reforms. Morrisons and Asda have been joined by Tesco, Aldi and Lidl.

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Economic calendar

CAN: 13:30 Retail Sales

UK: Friday 00:01 Gfk Consumer Confidence

JPN: Friday 03:00 BoJ Interest Rate Decision

As ever we look forward to keeping you in the loop and look out for our next update.

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