- We saw an already under pressure sterling weaken further yesterday as UK CPI y/y came in short of expectations.
- UK CPI y/y came in at 2.6% when 2.7% was expected. RPI input m/m also fell short of expectations coming in at 0.0% vs 0.4% expected. RPI y/y beat estimates at 3.6% vs 3.5%.
- GBP/USD began Tuesday trading at 1.2963 but fell by three quarters of a percent on the day following the UK inflation figures to close at 1.2866.
- GBP/EUR also posted losses on the day with the pair closing down a third of percent despite starting the day positively reaching a high of 1.1046. We closed down at 1.0966 which is very close to the lowest point GBP/EUR has traded since October 2016.
- The euro kept up its recent momentum posting another day of gains against the US dollar. EUR/USD close above 1.18 for the first time since January 2015.
- We saw a strong set of retail sales data from the US yesterday afternoon with core retail sales m/m beat expectations at 0.5% vs 0.3% and retail sales m/m coming in at 0.6% vs 0.3%.
- US officials set about reducing fears of a nuclear war with North Korea by saying that there was no imminent threat of that fear becoming a reality.
- UK Brexit minister David Davis revealed he will seek to retain a custom union with the EU for a transitional period of two years.
- North Korean leader Kim Jong-Um softened his rhetoric overnight and signaled that he would hold off an attack on the US island territory of Guam.
- New Zealand GDP price index came in at -0.4% overnight and wage price index q/q from Australia matched expectations coming in at 0.5%.
- This morning we have data from the UK at 9.30am in the form of average earnings index 3m/y and unemployment rate. Following this at 10am we see flash GDP q/q from the Eurozone.
- Our attention then turns to the US as we expect building permits data at 1.30pm beofre the FOMC meeting minutes are released at 7pm this evening.
- The UK Government will look to outline how the UK and Ireland can achieve a friction-less border after Brexit.
|Currency Pair||Interbank Rate||% Change on Day|
|Time (GMT)||Region||Data Release||Forecast||Previous|
|09:30||GBP||Average Earnings Index 3m/y||1.8%||1.8%|
|09:30||GBP||Claimant Count Change||3.2K||5.9K|
|10:00||EUR||Flash GDP q/q||0.6%||0.6%|
|19:00||USD||FOMC Meeting Minutes|