Looming Figures: Eurozone GDP and US Retail Sales
It is a busy day for global economy watchers as they will have plenty of data to digest today. The just released data showed that UK s consumer price index (CPI) rose less than expected in October. Further ahead in Britain, the Bank of England (BoE) Governor, Mark Carney is scheduled to speak about inflation before a parliamentary committee. He is also expected to touch upon the implications of Donald Trump’s election victory for the UK, amid a rapidly changing economic outlook.
In the Eurozone, German GDP advanced less than anticipated during the third quarter. Investors now await the Eurozone’s third quarter GDP figures. In the US, the headline act will be the release of retail sales data for October. Complementing this report will be the monthly survey of NYS’s manufacturers, conducted by the Federal Reserve Bank of New York: the Empire State Manufacturing Survey.
Pound Sterling – UK Markets
The Pound is trading lower against its major peers this morning. The just out data showed that British CPI undershot investor expectations in October, with clothing prices and university tuition fees being the biggest drag on prices. At the annual level, too, the nation’s CPI dipped after the September figure hit its highest level since November 2014. Meanwhile, the core inflation figures also missed investor expectations in October. Looking ahead, the BoE Governor, Mark Carney, is scheduled to appear before the Treasury Select Committee in a few hours. Key fellow central bank officials, Michael Saunders, Minouche Shafik and Ian McCafferty will also accompany him.
Yesterday, Sterling retreated against its US counterpart, as the greenback strengthened across the board. Nevertheless, the Pound managed to extend its gains against the Euro for the fifth straight session. Separately, the UK Prime Minister, Theresa May, urged business leaders to help her government win back disillusioned citizens and to create an economy that “works for everyone”.
US Dollar – US Markets
The greenback strengthened against its major peers yesterday. The US Dollar surged, amid rising hopes that fiscal and trade policies under Donald Trump’s Presidency would stoke inflation in the US. Separately, the Federal Reserve (Fed) Bank of Richmond President, Jeffrey Lacker, stated that Trump’s administration could cause the central bank to increase its benchmark interest rate sooner than anticipated.
The US Dollar is trading mixed against the Pound and the common currency this morning. Later in the session, market participants will focus on US advance retail sales, New York Empire State manufacturing index, import and export price index along with a speech from Boston Fed President, Eric Rosengren. Meanwhile, the advance retail sales for October are expected to grow in line with sales figures reported in September. Later in the week, traders will keenly watch the US consumer price index for further cues in the greenback.
Euro – European Markets
The Euro is trading higher against the greenback and the Pound this morning. Data released earlier in the session showed that German GDP advanced less than expected during the third quarter of this year. While consumer spending and government expenditure made a positive contribution during the period, investment levels remained subdued. Also, the nation’s exports declined for the quarter. In other economic news, French consumer prices came in flat for October, as falling services and food prices dragged on inflation in the Eurozone’s second-largest economy. Meanwhile in Spain, consumer price inflation rose last month. Moreover, Italian preliminary GDP advanced above expectations in the third quarter. Further ahead, there are several significant data points up for release in the Eurozone. The region’s trade balance and flash estimate of the third quarter GDP are due in a few hours. In addition to this, German ZEW survey for November will also cross the wires today.
Yesterday, data showed that the Eurozone’s industrial production dipped in September, driven down by a drop in durable goods output.
Other Currencies – Highlights
The Australian Dollar has extended its previous session losses against the greenback this morning. The Reserve Bank of Australia (RBA) released minutes of its November monetary policy meeting earlier in the session and it offered no new surprises. The RBA once again gave an upbeat assessment of the Australian economy, stating that inflation risks were balanced and that the economy continued to grow at a moderate pace. This indicated that further interest rate cuts were off the agenda for now. The central bank held its benchmark cash rate steady at a record low of 1.5% at the meeting. However, the central bank did express concern about Australia’s labour market. While the nation’s unemployment rate has fallen, most of the job growth is attributed to part-time work and the jobless rate of 5.6% is flattered by falling participation.
Looking ahead, the next two days are crucial for Australia as the nation will witness twin data releases in the form of wage price index and jobs report. This will provide a clearer picture of the economy.