UK: Weekly FX Market Update 10 July
GBP
Sterling had a volatile week, gaining against the euro and US dollar after a choppy end to the weeks trading.
Bank of England Gov Bailey speaks twice this week, however, further attention may be given to the release of the Financial Stability Report on Wednesday.
UK Average Earnings are announced on Tuesday. Will they point to a possible wage-price spiral occurring in the UK?
UK GDP is released on Thursday. Could this show the UK economy faltering in the face of persistent interest rate hikes?
EUR
ECB President Lagarde continues to warn of higher interest rates, stating that the ECB ‘wont stand idly by if margins and wages rise’.
Investors will look to ZEW Economic Sentiment, EU Economic Forecasts and EU Trade data for direction this week.
The single currency could also make a move after the release of US CPI on Wednesday.
USD
The FOMC meeting minutes were released on Wesnesay, showing a continued desire from the Fed to hike rates twice more this year.
Dallas Fed President Logan confirmed his support later in the week, that more rate hikes may be necessary.
US employment data released last Friday showed slightly weakening Non-Farm Payrolls, although average hourly earnings on a monthly basis rose from 0.3% to 0.4%.
US CPI could be the market highlight this week. Will the headline rate dip below last month’s 4% reading?
Will core CPI fall below last months 5.3% reading or remain ‘sticky’ and encourage more US rate hikes?
Consumer Sentiment will round the week off.
Events for the week ahead:
Mon Jul 10
15:00 USD FOMC Barr Speaks
20:00 GBP BoE Gov Bailey Speaks
Tue Jul 11
00:01 GBP BRC Retail Sales Monitor
02:30 AUD NAB Business Confidence
07:00 GBP Claimant Count Change/Unemployment Rate/Average Earnings
10:00 EUR German ZEW Economic Sentiment
Wed Jul 12
03:00 NZD RBNZ Interest Rate Decision/Statement
04:10 AUD Reserve Bank of Australia Gov Lowe Speaks
07:00 GBP Bank of England Financial Stability Report
09:00 GBP BoE Gov Bailey Speaks
13:30 USD CPI
15:00 CAD Bank of Canada Interest Rate Decision
16:00 CAD Bank of Canada Press Conference
Thu Jul 13
07:00 GBP GDP/Goods Trade Balance/Manufacturing Production
10:00 EUR EU Economic Forecasts
13:30 USD Producer Price Index
Fri Jul 14
10:00 EUR Trade Balance
15:00 USD Prelim Uni of Mich Consumer Sentiment