- UK Retail Sales was the only key figure yesterday morning and it didn’t disappoint. Expecting sales growth of just +0.2% during August, the actual figure of +1.0% underpinned a strong morning for the Pound. This was the highest print since May and was attributed to consumer spending in department stores and on home improvements.
- In the immediate aftermath of this figure Sterling rallied to 1.1326 against the Euro and 1.3607 against the US Dollar.
- US Existing Home Sales 5.35M (5.46M Exp)
- Speaking yesterday ECB Member Knot said that the recent rise in the Euro was a reflection of a strong Eurozone Economy, and supported calls for the Central Bank to start winding down its unprecedented stimulus measures.
- With little to no data due for the remainder of yesterday morning/afternoon all attention was focused on the US FOMC meeting in the evening.
- As expected the Federal Reserve opted to keep rates on hold at <1.25%, whilst confirming their intentions to begin reducing its balance sheet next month.
- Crucially the Fed’s ‘Dot Plot’ revealed they continue to forecast one more rate hike in 2017, a further three in 2018, two in 2019 and one in 2020.
- Speaking afterwards in a press conference Fed Chair Yellen said that the shortfall in inflation was a bit of a mystery to the committee, but that it didn’t reflect the broad economic conditions.
- The US Dollar rallied in FX space following the Fed meeting. GBP/USD had spiked to a high of 1.3655 ahead of the meeting but plummeted down to a day’s low of 1.3452 shortly after, whilst similarly EUR/USD spiked to 1.2034 before dropping back to trade below the 1.1900 handle.
- New Zealand GDP q/q 0.8% as expected
- New Zealand Visitor Arrivals m/m -0.3% (-5.3% previous)
- The Bank of Japan kept interest rates on hold at -0.10% this morning, with no changes to their monetary stimulus program. Members voted 8-1 in favour of the action, the surprise twist being that new board member Kataoka voting against this action
- Swiss Trade Balance 2.17Bn (2.41Bn Exp)
- The Aussie Dollar is on the back-foot this morning following comments for RBA Governor Lowe.
- Key this morning will be UK Public Net Sector borrowing due at 9.30am.
- This afternoon US Unemployment Claims and Philly Fed Manufacturing will be closely watched.
- Also worth looking out for comments from ECB President Draghi who speaks at 2.30pm.
|Currency Pair||Interbank Rate||% Change on Day|
|Time (GMT)||Region||Data Release||Forecast||Previous|
|09.30||GBP||Public Sector Net Borrowing||6.5Bn||-0.8Bn|
|09.30||GBP||High Street Lending||41.7K||41.6K|
|13.30||CAD||Wholesale Sales m/m||-0.7%||-0.5%|
|13.30||USD||Philly Fed Manufacturing Index||17.3||18.9|
|14.30||EUR||ECB President Draghi Speaks|
|15.00||EUR||Eurozone Consumer Confidence||-2||-2|