The latest UK labour-market data created headlines with unemployment falling to a 42-year low of 4.4% in the three months to June. There was a decline in the jobless claimant count for July compared with expectations of a small increase for the month. Unemployment is at its lowest level since the mid-1970s; it would not be surprising to see the jobless rate edging up later this year in response to the current economic slowdown.
There was also a stronger-than-expected figure for year-on-year average earnings growth at 2.1% from a revised 1.9% previously, although there was still a decline in real earnings. The data overall helped underpin confidence in the UK outlook which provided some respite from recent selling.
Manufacturers reported the strongest export sales increase since the end of 2014, according to a survey of more than 3,500 exporters published by the British Chambers of Commerce (BCC) and logistics firm DHL.
The Pound recovered from a retreat to below 1.0910 against the Euro but retested 1.2900 against the Dollar on wider US currency losses. The latest retail sales data will be released on Today amid concerns over underlying spending trends.
The US housing starts dropped 58k in July and June’s figure was revised downward, reducing confidence in US outlook, although the impact was limited. July’s FOMC minutes provided no major surprises with most members remaining confident that inflation would hold steady around the 2% level over the medium term. There was, however, increased uncertainty surrounding trends and agreement that inflation would be monitored closely whilst some members preached caution over rate hikes.
The Dollar came under fresh selling pressure following the minutes as new doubts arose over Fed tightening policy with futures markets. The chance of a further increase in rates was reduced before year-end, dipping to below 40%.
Initial Jobless Claims are out today, and Continuing Jobless Claims and Philly Fed Manufacturing are in the data docket this afternoon.
Better-than-expected Eurozone Q2 annualized growth figures kept sentiment underpinned around the Euro yesterday as we saw the Eurozone Q2 flash GDP growth figures.
Reports from European Central Bank (ECB) sources emerged in the afternoon that bank President Draghi would not be delivering a fresh policy message at the Jackson Hole symposium next week and that he wanted to delay any discussion of potential changes until the Autumn. Given that there had been speculation that Draghi would start to prepare the ground for ECB bond-purchase tapering at Jackson Hole, the comments triggered renewed selling pressure on the Euro with a further test of support below 1.1700 against the Dollar.
Later today, the European Central Bank (ECB) minutes are likely to provide fresh insights on the ECB Governing Council’s discussion on the recent Euro appreciation and its impact on the growth and inflation outlook.
Data To Watch:
7:00am EUR Wholesale Price Index (YoY) (MoM) ( (Jul)
9:30am GBP Retail Sales ex-Fuel (MoM) (YoY) (Jul), Retail Sales (YoY) (MoM) (Jul)
10:00am EUR Consumer Price Index (YoY) (MoM) (Jul)
10:00am EUR Consumer Price Index - Core (MoM) (YoY) (Jul)
11:00am EUR Trade Balance n.s.a. (Jul), 11:00am Trade Balance s.a. (Jul)
12:30pm EUR ECB Monetary Policy Meeting Accounts
1:30pm USD Continuing Jobless Claims (Aug 7), Initial Jobless Claims (Aug 14), Philadelphia Fed Manufacturing Survey (Aug)
2:15pm USD Capacity Utilization (Jul), Industrial Production (MoM) (Jul)
5:30pm USD FOMC Member Kaplan Speech
Posted in Daily Market News on Aug 17 2017
GBP UK consumer prices declined 0.1% in July and the year-on-year rate was unchanged at 2.6% compared with consensus estimates of a small increase to 2.7% for the month. Core inflation was also static at 2.4%, although the Retail Price Index (RPI) inflation rate increased to 3.6% from 3.5% as...VIEW FULL ARTICLE
Posted in Daily Market News on Aug 16 2017 by Rob Affleck