Author: Terry Lovell (Head of Sales), Orbis Exchange
Market Report - 13/02/23 - 17/02/23Key Points
- CPI Data out for the UK
- GDP Figures out in the Eurozone
- CPI Data out for the US
Last week we saw GDP figures released in the UK, the last 3 quarters results showed negative growth, so a small growth this time round from -0.2% to 0% is only a slight positive as the BoE still expects the economy to shrink by 0.5% this year. This week we have the unemployment rate being released, if we see an increase in the rate then this typically leads to a negative effect on the Pound, but should we see a drop in the unemployment rate then this can be seen as bullish for the GBP. we also have CPI data being released this week, it is expected to see the third consecutive drop in the inflation levels, conversely a drop in inflation levels indicates potentially smaller interest rate hikes in the future, so typically a higher-than-expected results tends to be seen as bullish for the GBP, but a drop in price levels could have a negative effect on Sterling quotes.
Last week the main piece of data we had released for the Eurozone was retail sales on Monday, this saw a bigger than expected drop from -2.5% to -2.8%. This set the Euro up to an average week where we saw no real losses or gains against its 2 major competitors. This week we have GDP figures coming out Tuesday, this data release is important as if we see another drop in the GDP figures then this could see the Eurozone slip further into recession as their last 2 releases have both seen a drop. However they are expected to avoid this which is in part why the Euro has strengthened against the Dollar and GBP in the New Year. This main information in terms of data coming out in the Eurozone, this means that this week we could look elsewhere for Euro movements as data in the UK and US could be the big market movers for the Euro.
The Michigan Consumer Sentiment was released at the back end of last week, we saw the results translating into greater spending and faster economic growth, this could potentially mean a pickup in the inflation levels although is still positive for the economy. This could push the Fed to be more hawkish when it comes to the next interest rate decision. This week we have inflation levels being released, typically, a rise in the price levels could be seen as positive for the Dollar but if we see a drop as expected then this could have a negative effect on USD quotes. As well as this we also have retail sales figures coming out for the US. a huge jump in the sales figures is expected, the last results had retail sales figures at -1.1% whereas the consensus has come in at 0.9%. Typically, any rise in the sales figures is seen as positive for USD quotes, but if we see a further drop in the figures then this can be seen as bearish for the Dollar. We will also be keeping an eye on U.S Foreign Policy towards flying objects that have been spotted over U.S Airspace and what global uncertainty this may bring.
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