14th July 2017 Market Update
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🇬🇧 GBP – The pound jumped higher against the euro yesterday following Bank of England policymaker Ian McCafferty’s comments arguing that tapering its substantial quantitative easing programme should begin soon.
McCafferty spoke regarding the plans to cut bond yields, and he stated “given that other central banks are thinking about it, I think it would be remiss of us not to at least think about it.” A number of other MPC members including Michael Saunders and possibly Andy Haldane are expected to vote in favour of higher interest rates.
Today, there are no releases from the UK, so the pound will be at the mercy of movement in other currencies.
🇪🇺 EUR – German inflation data came out as expected and had no real impact on the currency.
This morning, trade balance figures will be released, any uptick here could support the euro.
🇺🇸 USD – Janet Yellen is giving testimony to Congress for the second day in a row. There were no real surprises for the markets. US economic data released yesterday included the June PPI and initial jobless claims, both coming in slightly under expectations, though not market moving.
Today from the US inflation numbers will be in focus, with expectations for a slight decline from the previous 1.9%. We also have retail sales expected to return back into positive territory which could help buoy the dollar.
1.30pm – CPI m/m, Core CPI m/m, Core Retail Sales m/m, Retail Sales m/m
Our View: After a volatile week for the pound, we could see the pound gain further, especially after yesterday’s comments from Ian McCafferty.
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