GBP edges higher against the euro but struggles against the buck…
The pound had a reason to cheer yesterday following a solid UK retail sales report. The data revealed that the UK consumer’s appetite to spend is healthy and still appears unphased by much of the Brexit uncertainty. The report tops off what’s been a good week for the UK on the data-front. Tuesday’s impressive jobs number mixed with Wednesday’s hotter than expected inflation reading will go a long way to ensuring the Bank must thoroughly consider its options before surrendering to the current global theme of lowering interest rates. The latest surprise coming from the Bank of Mexico who shocked the market by cutting 25bps yesterday afternoon. No doubt, both the European Central Bank and Federal Reserve are teeing themselves up for another dose of stimulus in September.
Yesterday also saw a very solid retail sales print from the US. It appears the issues with the US economy are gradually becoming clearer, a healthy consumer but an industrial sector in deep need of assistance. The pressure is well and truly on the Fed and, in particular, Jay Powell to deliver. From Trump’s abusive tweets aimed at Chair Powell to the financial markets which are ploughing into US government debt like the apocalypse is nigh. It’s highly likely he’ll crack under pressure and deliver another 25bps cut in September.
Written by Viv Savani. 8:32am, August 16th 2019
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8:12am, January 10th 2020
Markets steady as key US non-farm payrolls data arrives…