UK retail sales dominated yesterday’s morning session. UK retail sales fell sharply from 1.7% (revised down from 1.9%) to -0.6% and the yearly change decreased from 6.2% to 3.8%. All four indicators missed estimates and all four previous figures were revised lower as the bearish retail sales numbers drove Sterling lower against its major counterparts. In the afternoon, we had two pieces of high tier data released from the US. Unemployment claims narrowly exceeded economist’s consensus of 272k whilst the Philly Fed Manufacturing Index also beat expectations, increasing to a bullish 1.9 against last month’s -4.5.
Throughout the day, markets continued to digest the previous evenings FOMC minutes. In the statement following their October meeting, Fed policy makers made it clear that an interest-rate increase would be considered at their “next meeting”, which is scheduled for 15th-16th December. The Fed remained relatively unchanged and maintained their slightly hawkish stance. A number of participants said the FOMC should avoid delay in firming; some thought goals had already been met, however stressed that a rate rise remains data dependant.
A quiet end to the week with ECB President Draghi once again taking the stand at the Euro Finance Week, in Frankfurt. Meanwhile, the UK’s public sector borrowing numbers are due to decrease from last month.