Safe haven flows continue as the world remains nervous

Tensions between North Korea and the US dominated headlines last week. Trumps stance on the situation was that North Korea would be met with “fire and fury and frankly power, the likes of which this world has never seen before”, demonstrating Trumps fearless attitude to use Americas military power, if necessary. Safe haven demand has increased as further developments from this story hits the wires.

There is a big week ahead for the Pound with some pivotal pieces of high tier data being released. If we see the majority of this week’s releases fail to meet the consensus it could be the nail in the coffin for a 2017 rate rise. Of course, on the more positive side, a raft of bullish data below could add fuel to the fire for the BoE to act.

Monday

Monday sees a quiet start to the week with no high tier data releases. However, the markets will continue to digest Friday’s US CPI figure and what it could mean for any future Fed rate rises.

Tuesday

The UK will release their CPI figure, expected to post 2.7% on Tuesday. Inflation is currently above the BOE’s target of 2% at 2.6%. However, the drop in inflation last month reduced the pressure on the BOE to raise interest rates. Tuesday’s figure will give the markets clues as to whether the BOE need to act to bring inflation back down towards the target. In the afternoon, the US will release the Retail Sales figure.

  • UK CPI
  • UK PPI Index
  • UK RPI
  • US Retail Sales

Wednesday

On Wednesday, the UK release a raft of high tier labour data, in the form of the Unemployment Rate and Average Earnings Index. Both readings are forecast to remain sticky at the previous levels of 4.5% and 1.8% respectively. In the evening, arguably the biggest piece of data of the week; the FOMC minutes are released. Markets will be keen to decipher the tone of the Fed to gain an idea of the Feds rate rise plans.

  • UK Claimant Count Change
  • UK Unemployment Rate
  • US Building Permits
  • Crude Oil Inventories
  • US FOMC Meeting Minutes
  • NZS PPI Input

Thursday

High tier data released to and from the pond on Thursday. In the morning, the UK release their Retail Sales Figure which is expected to remain positive at 0.2%. In the afternoon, markets gain an insight into the US labour market with the release of the Weekly Jobless Claims.

  • AUD Employment Change
  • AUD Unemployment Rate
  • UK Retail Sales
  • US Unemployment Claims
  • US Philly Fed Manufacturing Index

Friday

A relatively quiet end to the week with only a couple of pieces of medium impact data to sink our teeth into. The University of Michigan Consumer Sentiment is expected to tick higher at 94.1, whilst FOMC member Robert Kaplan is due to speak at the Dallas County Community College late afternoon.

  • CAD CPI
  • CAD Core Retail Sales
  • US Prelim UoM Consumer Sentiment
  • FOMC Member Kaplan Speaks