Sterling’s honeymoon halted by poor data

Yesterday’s markets

16th November 2016

  • EUR German Prelim GDP q/q: 0.2%
  • AUD RBA Gov Lowe Speaks
  • GBP CPI y/y: 0.9%
  • GBP Inflation Report Hearings
  • USD Core Retail Sales m/m: 0.8%
  • USD Retail Sales m/m: 0.8%

Yesterday was filled with high tier data as the markets focus turned to the economy instead of politics. UK inflation hit the wires first and posted a disappointing 0.9% versus its 1.1% forecast. Although many economists expected this reading to increase due to the recent fall in the value of the Pound, the Consumer Price Index declined, stating that there is no clear evidence that Brexit pressures have filtered through to prices in retailers just yet. Sterling was under further pressure yesterday as a leaked memo seen by The Times suggested further government chaos and Brexit uncertainty. The reports were quickly silenced by the Government who stated that they “do not recognise” the memo and the document was an unsolicited pitch for work from a consultancy firm.

In the afternoon, the States released its retail sales and Empire State Manufacturing Index. US retail sales exceeded economists’ consensus and registered a 0.8%. Empire State Manufacturing Index also beat expectations, posting a 1.5. The bullish data has added further fuel to the fire for a Fed rate rise at the committees next meeting in December.

Today’s markets

15th November 2016

  • GBP Average Earnings Index 3m/y
  • GBP  Claimant Count Change
  • GBP Unemployment Rate
  • CAD Manufacturing Sales m/m
  • USD PPI m/m
  • AUD Employment Change

Today morning we gain an insight into the UK labour market as we see the release of the unemployment rate, average earnings and jobless claims. Unemployment and earning are forecasted to remain sticky, with unemployment rate at 4.9% and earnings stuck at 2.3%. However, the number of people claiming unemployment benefits is set to increase by 1.9k. In the afternoon, US post their monthly Industrial production gauge, with expectations of a slight increase from previous 0.1% to 0.2%.