A devastating week for Sterling last week after the government’s talks broke down with the Labour party, signalling a drastically higher probability of a No-Deal… solid UK Unemployment data saw the figure drop to 3.8%, however Earnings slipped as well… GBPUSD and GBPEUR saw ten consecutive days of losses, with the 1.1300s and 1.2700 area in play respectively… this week sees the European elections kick off with UK CPI the headline print for the week…
Whilst another round of trade talks between the US and China are keeping investors on edge this week, US Inflation provided a distraction as it dropped to 1.6%, the smallest print since June 2017, with lower energy costs the main culprit once again.
Nick Kilbey quoted in the Guardian
Trump’s mantra of ‘Making America Great Again’ is echoing across the US economy as third quarter GDP growth outpaced market consensus with a print of 3.5%. Consumer spending and businesses increasing their inventories aided the strongest back to back quarters for growth in over two years.
Today’s print was crucial for Trump and the GOP ahead of the Midterm elections as GDP seems to be aligning with the President’s target for 2018, however it could spark the Fed to consider a more aggressive monetary policy.
Balraj Sroya quoted in the Guardian
Mario Draghi stuck to the script again at today’s ECB Press Conference, delivering yet another ‘balanced’ assessment of the eurozone’s economy. The ECB President quelled recent concerns of weaker economic data as merely a slowdown of growth momentum, not a downturn. This aside, the ECB remain committed to ending the central bank’s bond-buying programme come December.
Transitory or not, Draghi and Co. will need to buy themselves more time to distinguish what effect trade wars, Brexit and the recent Italian budget crisis will have on its interest rate hike timeline in 2019.
Anthony Kurukgy quoted in the Guardian