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September 2016

Eurozone trade balance expected to contract

Published: Thursday 15 September 2016

  • Eurozone trade balance expected to contract 
  • Bank of England MPC meeting no change expected
There’s a packed calendar of economic data releases due for publication over the course of today, but we can start by taking a look at information released overnight.  The New Zealand Dollar has slipped following disappointing New Zealand GDP data particularly the Q2 number which was expected to be 1.1% but printed at 0.9%.  Also overnight Australia posted mixed Employment data with the change in employment contracting whilst the unemployment rate also fell marginally to 5.6%.

Already this morning as expected, the Swiss National Bank have kept the interest rate unchanged at -0.75% maintaining their stance to moderate the strength of the Swiss Franc.  At 10am Euro Zone Consumer Prices Index is expected to show inflation rising to 0.1% previously -0.6%.  The EU Trade Balance is also expected to shrink from €29.2B to €25B.

There’s a strong UK focus today, UK Retail Sales numbers just released showed a positive 6.2% annual figure but more significantly the month on month number -0.2% was a better than expected.  At midday the Bank of England’s MPC Monetary Policy Committee meeting are due to announce their decisions on the UK interest rate and Asset Purchase Program.  Further rate cuts or stimulus are unlikely but given Mark Carney’s previous remarks on taking any necessary measures, the minutes will be scrutinised.  If the votes to maintain the interest rate and QE program are not unanimous and any members of the MPC vote for a further rate cut, this would put the Pound under considerable pressure.

This afternoon the action crosses the Atlantic with a full docket of US data due for release, the highlights being: US Jobless claims, the US Current account balance, US Producer Prices Index,  the Philadelphia Fed Manufacturing Index, US Advance and Core Retail sales followed later by US Industrial Production.  Any significant swings in the US data will feed into US Interest rate forecasts (next FOMC meeting 21st September) and of course there’s always scope for reaction to any political news from the US Presidential campaign.

Thoughts for the day

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
Sir Winston Churchill
If a man be gracious and courteous to strangers, it shows he is a citizen of the world, and that his heart is no island cut off from other lands, but a continent that joins to them.
Sir Frances Bacon

Today's Major Economic Releases 

Market BST Data/Event Previous Expected
GBP 09:30 UK: Retail sales m/m 1.4% -0.2%
EUR 10:00 EU: Final CPI y/y 0.2% 0.2%
GBP 12:00 UK: Official bank rate 0.25% 0.25%
GBP 12:00 MPC official bank rate vote 0-9-0 0-0-9
GBP 12:00 Monetary policy summary    
GBP 12:00 UK: Asset purchase facility 435b 435b
GBP 12:00 MPC asset purchase facility vote 6-0-3 0-0-9
USD 13:30 US: Core retail sales m/m -0.3% 0.3%
USD 13:30 US: PPI m/m -0.3% 0.1%
USD 13:30 Philly Fed manufacturing index 2.0 1.1
USD 13:30 US: Retail sales m/m 0.0% -0.1%
USD 13:30 US: Unemployment claims 259k 262k
USD 14:15 US: Industrial production m/m 0.7% -0.2%

Daily Currency Analysis by Chris Verdet

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