US data disappoints, May defeated in Parliament (again)…
The highlight of Thursday’s trading session was a shockingly bad piece of US economic data. December retail sales being the culprit. The figures were delayed due to the government shutdown which began at the end of December. They displayed the biggest miss versus consensus since March 2009. Forecasts were for a small gain of 0.1%, however, the actual print posted a -1.2% number. The government shutdown began in the last few days of December so cannot be solely blamed. Many are trying to come up with reasons for this surprise reading but the reality is, the US economy may not be as strong as claimed. The reading immediately sent the dollar lower with the pound pushing back towards $1.28 while the euro battled with the $1.13 level. This data release has definitely caught the attention of the market and all its commentators. No doubt, US data will now be scrutinised even more from here on as people speculate as to whether a recession is just around the corner.
Theresa May suffered another bloody nose yesterday as the House of Commons once again defeated a government motion which backed her current Brexit strategy. 66 Conservative MPs abstained while 5 voted against the government. The prominent Conservative European Research Group decided to abstain as they felt they could not vote for something which takes away the prospect of no-deal. Once again PM May’s authority has been put into question, something which will not help her cause when she returns to Brussels. Sterling took this development in its stride. It’s already lost significant ground from reaching the €1.16 and $1.32 against the euro and US dollar, respectively. Today it’s the UK’s turn to release its latest retail sales report – brace yourselves!
Enjoy the weekend.
Written by Viv Savani. 8:17am, February 15th 2019
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