Whilst yesterday’s upbeat UK retail sales print did bode well for the strength of the UK’s economy, the market spotlight will now be shifting to the 2nd Q1 GDP estimate, which many analysts expect to ease.
- UK CPI forecast to slide
- AUD consumer confidence expected to dip
- Japan’s GDP figures likely to weaken JPY
The pound may be forced to cede some ground this morning as the UK releases its latest consumer price index (CPI).
The index is expected to show that the UK’s inflation rate slipped from 3% to 2.9% in January, reaching its lowest levels since August.
The decline may weaken the case for the Bank of England (BoE) to accelerate its monetary tightening this year and could dampen speculation of a rate hike in May.
On the other hand the drop in inflation is likely to be welcomed by consumer groups as it helps to ease the financial pressure facing households.
This could prompt an uptick in Sterling on hopes that it could lift consumer spending, which in turn may bolster economic growth.
Australian consumer confidence expected to ease
The Australian dollar may trend lower in overnight trade today as Westpac publishes its latest consumer sentiment survey.
Analysts predict that the confidence index will have dipped from a four-year high of 105.1 struck in January, to 102 in February.
It is expected that the index will have slumped from its high as the lack of New Year optimism and deteriorating household finances likely prompt sentiment to tumble.
However some analysts suggest that confidence may have continued to climb this month, as the prospect of increasing interest rates this year appears to have been dismissed by the Reserve Bank of Australia (RBA) in its latest policy meeting.
JPY poised to slide on GDP figures
JPY may also stumble during the Asian trading session tonight as Japan releases a preliminary reading of its fourth quarter 2017 GDP figures.
Economists forecast that the reading will show that the country’s economic growth slowed from 0.6% to 0.2% in the final quarter of 2017.
This would see GDP slump to its lowest levels since Q4 2016 and is likely to be driven by slowing exports, the main source of growth in Japan.
Some investors are a little more optimistic however, with analysts at Moody’s forecasting that growth will be more robust at 0.4%, thanks to increased global demand.
Tuesday, 13 February, 2018
09:30 GBP Inflation
23:30 AUD Consumer Confidence
23:50 JPY GDP Q4
Joining the corporate trading desk in 2007, Phil now overseas 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 FSA approval and has completed the Certificate in International Treasury Management (CertiTM)