All is quiet on the Data front as those exacerbated markets enjoy a well-earned time out (enjoy it while it lasts!). Amid little economic data on tap in the UK, investor sentiment for Sterling remains subdued against its major peers this morning. Going forward, strong wage growth figures could heighten the appeal of the Pound as it would put pressure on the BoE to raise its benchmark interest rate from a record low. I don't know about you, but I can’t help but feel those BofE minutes are going to get considerably more interesting over the next six months.

In Europe, focus will be on cues from German ZEW economic outlook survey ahead of the flash estimate of second quarter GDP which is scheduled in the final session of this week. Across the Atlantic, a string of US economic releases including preliminary unit labour costs, nonfarm productivity and NFIB’s business optimism data will attract market attention. Oh and incidentally, expect China’s devaluation of the Yuan to rain ever so slightly on this upcoming parade!

Pound Sterling – UK Markets

The British Retail Consortium earlier today stated that though retail spending in the UK topped market expectations for July, the pace of retail spending growth was slower than the previous month as wet weather put a dampener on spending plans of consumers last month. Those rain clouds show no sign of dissipating this morning, Sterling is trading in a narrow range against the US Dollar.

Moving ahead, the Pound could recover from its recent weakness against the greenback if UK labour market data scheduled for release tomorrow shows a higher than expected rise in wages for the period until July. Come to think about it George Osbourne has looked a little paler than usual of recent,! The BoE minutes last week had shown that fewer members voted to raise interest rates this month, while the UK central bank Governor Mark Carney stressed that the timing of an interest rate rise will depend on economic developments, wage data being one of the key indicators. If wage growth records subdued growth, the BoE is likely to retain its monetary policy for a longer time and the Pound will struggle to make much headway.

US Dollar – US Markets

The US Dollar has surrendered its early session gains against the Euro this morning, such a surrender is expected to be temporary...yes those white flags haven't quite been raised yet. Why? Well for one, there were mixed indications from Fed officials in their speeches yesterday on the timing of an interest rate rise in the US. The Atlanta Fed President Dennis Lockhart yesterday expressed optimism in the US economy’s resilience compared to a few months ago and indicated that he was convinced that the Fed was inching closer to raising short term interest rates, probably as soon as September. On the contrary, Federal Reserve Vice Chairman Stanley Fischer remarked that though he was content with progress in the US employment, the US Fed is likely to wait for inflation to move towards its desirable target before it starts to increase the benchmark rate. Honestly, between the Fed and BofE, I’m thinking of giving up these Daily Updates!

Following the encouraging nonfarm payrolls report last week, markets today look ahead to more labour market related releases including the preliminary second quarter prints on unit labour costs and nonfarm productivity for further cues to gauge the health of the US job market. Separately, NFIB’s small business optimism indicator due today will be tracked to assess the level of improvement in outlook for such firms. Expect a slight spring in the step, just no back flips.

Euro – European Markets

The Euro – US Dollar currency pair has currently retraced back above the 1.1 mark, after having slipped lower earlier today amid a broad strength in the US Dollar. News reports indicate that Greece and its international creditors have closed in on an agreement setting out the terms of a third bailout package. The rescue deal comes ahead of a debt repayment that the Greek government needs to make to the European Central Bank next week. I have a theory that Alexis Tsipras enters these negotiations heavily sedated, just a theory.

On the macro front, the final inflation figures from Italy released earlier in the day confirmed the lack of price pressures in the economy for July. German wholesale price index recorded a rise from the previous month, however, it failed to make an impact on the Euro. Moving ahead, investor focus will drift towards cues from the ZEW economic survey, scheduled shortly, for the Euro zone and its largest economy. Markets anticipate that ZEW’s current and expectations metrics for the German economy will rise in August, fuelling hopes that the flash GDP print for the second quarter due later this week will be encouraging. Sounds like a good note to end on, so I shall!

Other Currencies – Highlights

The Australian Dollar dropped well below the 0.74 mark against the US Dollar earlier in the day, following the release of downbeat business survey results from Australia, while prospects of an interest rate rise by the US Federal Reserve continued to lend support to the greenback. The National Australia Bank earlier today revealed that Australian business confidence eased sharply in July as mining and construction firms turned more cautious possibly in light of recent concerns surrounding growth in China. Furthermore, conditions across various industries for employment, forward orders and exports weakened for July. The survey data also indicated that labour costs among firms remained subdued, consistent with lack of wage inflationary pressures.

With the RBA highlighting an improved outlook for its labour market, a pickup in the nation’s wage price index which is due for release tomorrow could reduce speculation for lower borrowing costs and support the Australian Dollar. Meanwhile, further trading in the Aussie Dollar - US Dollar currency pair will likely to be determined by a slew of US economic releases scheduled later in the day. Tomorrow’s Daily News may just get the better of me, please bear with me!