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November 2017

Australian and New Zealand Dollars feel the weight of Chinese data

Published: Tuesday 14 November 2017

  • Australian and New Zealand Dollars feel the weight of Chinese data
  • Brexit timetable discussed
  • UK inflation below forecast
  • Euro strengthens on strong German data
By Alastair Sweetman  

Australian and New Zealand Dollars feel the weight of Chinese data
Overnight in Australia, data released from National Australia Bank (NAB) showed that business conditions hit their highest level since their records began in 1997. The markets’ reaction was muted, however, as Chinese retail sales figures also released overnight came in below expectations – October sales rose 10% versus 10.5% expected. Industrial production also rose 6.2% year on year, below the expected 6.6% year on year.  This weighed on the Australian and New Zealand Dollars, which helped push GBPAUD through 1.72 and GBPNZD through 1.91.
Brexit timetable discussed
David Davis announced in the House of Commons that the UK parliament will get to vote on the final Brexit deal – the timetable being that the “principal policy aim” will be read by October 2018, then debates in Parliament; and the final vote before B-day, 29th March 2019. This doesn’t, however, give Parliament a vote in the event of a no-deal, which looks increasingly likely…
UK inflation below forecast
We’ve just had UK inflation data released and it’s come in at 3.0% for October, matching September’s headline figure, which was a five year high. There has been a rise in food prices across all main classes of product, including dairy, which has seen recent wholesale shortages. This was below the 3.1% figure forecast, so the Pound sold off a touch on the announcement. We’ll be hearing from Bank of England (BoE) Governor Mark Carney shortly.
Euro strengthens on strong German data
The Euro has gained over the last trading session, up from 1.16 to 1.17 on EURUSD and GBPEUR, breaking down through 1.1200, with this morning’s German data helping to boost the single currency. German Gross Domestic Product (GDP) data (preliminary reading) beat expectations for the third quarter, growing 0.8% versus the 0.6% expectation.
What to look out for today
The main European data of note for the rest of the day will be the German ZEW Survey; in the US, Federal Reserve Chair Janet Yellen speaking, the US Producer Price Index and then overnight, the Westpac Consumer Confidence report for Australia.

Behind every great man is a woman rolling her eyes

I can resist everything except temptation. 

Weather forecast for tonight: dark.

Today's Major Economic Releases

Market BST Data/Event Previous Expected
GBP 09:30 UK: Consumer Price Index 3.0% 3.1%
GBP 09:30 UK: Core Consumer Price Index 2.7% 2.8%
GBP 09:30 UK: Producer Price Index Input 0.4% 0.8%
GBP 09:30 UK: Retail Price Index 3.9% 4.1%
EUR 10:00 European Central Bank President Draghi Speaks    
EUR 10:00 EU: Flash Gross Domestic Product 0.6% 0.6%
EUR 10:00 EU: Industrial Production 1.4% -0.6%
GBP 10:00 Bank of England Governor Carney Speaks    
USD 10:00 Federal Reserve Chair Yellen Speaks    
USD 13:30 US: Producer Price Index 0.4% 0.1%
USD 13:30 US: Core Producer Price Index 0.4% 0.2%

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