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Retail Therapy

Retail Therapy

UK Retail sales in January rose faster than expected; the annualized rate printed 4.2% against expectations of 3.4%; the biggest annual rise since December 2016. The monthly figure revealed a rise of a percentage point and core retail sales, which excludes the volatile food and energy prices, rose by 4.1%, which was higher than the expected 3.0%. The positive surprise meant Sterling rose after data, having previously been slated for a fall. The Pound regained the 1.2900 mark on the Dollar and 1.1400 on the Euro.

Political muddling through will continue and the Cooper Amendment (delay) will likely re-surface on Feb 27th. A group of Labour MPs are set to make a press conference today, generating speculation that they are leaving the party perhaps to start another.   


The US Dollar closed the week on a firm note amidst improving market sentiment. The DXY Index, which tracks the Dollar against a basket of foreign currencies, is up 0.20% following reports that US-China trade talks are progressing smoothly.

Market participants have considered the recent developments from the US-China negotiations in Beijing positive ahead of this week’s further talks in Washington. In the meantime, investors will remain vigilant to upcoming results on the US calendar and the release of the FOMC minutes. Despite market participants holding on to the idea of a potential slowdown in the US economy in the next months, the slowdown in overseas economies, in combination with ‘softer’ stance in G10 central banks, keeps occasional dips in the Buck somewhat shallow.

Looking ahead, the US-China trade talks are expected to drive the sentiment along with the publication of the FOMC minutes on Wednesday and the Philly Fed index. In addition, several Fed speakers are also on the cards throughout the week.


Growing market concerns over a slowdown in the Eurozone economy continued to weigh heavily on the single currency. The European Central Bank’s (ECB) Coeure opened the door to other, long-term, refinancing options whilst also mentioning in his speech that Eurozone inflation was shallow. His comments dampened hopes of a 2019 rate hike which exerted downward pressure on the Euro. Early on Friday, the EURUSD hit 1.1235 but rallied later in the session.

Virtually no data is due out today in Europe, but this week sees the ZEW sentiment survey tomorrow, the IHS Markit PMI survey early on Thursday and finally the minutes from the ECB’s last policy meeting.


Data to watch:


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