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Markets digest easing UK inflation: UK retail sales and US Fed business outlook results imminent

business-articlesMarkets digest easing UK inflation: UK retail sales and US Fed business outlook results imminent
  • UK Retail Sales
  • US Philadelphia Fed Business Outlook
  • US Jobless Claims
GBP – UK retail sales and resuming Brexit negotiations to take the spotlight

Markets are still reeling from yesterday’s surprising fall in UK consumer price inflation and what it could mean for the Bank of England’s (BoE) monetary policy decision next month, but the spotlight should temporarily shift today to the UK’s retail sales and the resumption of Brexit talks.

Analysts are expecting retail sales (including vehicle fuel) to rise from 1.5% to 2.0% year-on-year in March, an upbeat reading that should hopefully indicate easing pressures on the retail sector.

This would also make the underlying three-month picture for the retail sector one of rising sales, and with wage growth finally exceeding consumer price inflation, this trend could be set to continue.

Beyond this, Senior British and EU officials have officially resumed discussions regarding the UK’s future relationship with the European Union, with meetings taking place yesterday to discuss the negotiating guidelines for future talks and various scheduling details.

Whilst very little is expected to have occurred as a result of these preliminary meetings, markets will be keeping a keen eye on any comments from officials, with pessimism liable to hurt Sterling and optimism liable to make it rise.

USD – US Philadelphia Fed business outlook and jobless claims could extend USD climb

In the US today markets will largely be assessing recent speeches from Federal Open Market Committee (FOMC) members, as well as the latest jobless claims readings and the Philadelphia Fed business outlook result.

Markets are expecting the Philadelphia Fed manufacturing index to climb from 22.3 to a score of 25 in April, whilst continuing jobless claims are expected to have diminished even further.

Beyond this, investors will be assessing speeches from Fed Presidents Brainard, Quarles, and Mester, with Brainard and Quarles regarded as centrist and Mester regarded as outright hawkish.

If these voting FOMC members seem optimistic on the trajectory of US inflation then it could give the ‘Greenback’ even greater support.

CAD – Canada’s ADP March payroll report liable to influence CAD exchange rates

Today will also feature Canada’s ADP employment change report for March – a monthly measure of the total change in Canadian nonfarm payroll employment.

Markets currently forecast a significant fall from 32.7k previously to 7.4k.

If this occurs then it could extend the ‘Loonie’s’ current slump, with yesterday’s rather cautious rate decision and accompanying statement keeping the Canadian Dollar in the doldrums.

Upcoming Data

Thursday 19 April

09:00 EUR Eurozone Current Account (February)
08:30 GBP Retail Sales (March)
13:30 USD Initial Jobless Claims (April 14)
13:30 USD Continuing Claims (April 7)
13:30 USD Philadelphia Fed Business Outlook (April)
13:30 CAD ADP Payroll Report (March)
23:35 USD Fed Mester Speaks on Economic Outlook and Policy
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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