20th July 2018 Market Update
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?? GBP – Sterling took another recent hit as retails sales dropped and came in at -0.5%. Sterling dropped further in response against both the dollar and euro. The World Cup and warm weather were seen as the reason for this, as people spent less on the high street. Today public-sector borrowing is out from the UK, however is unlikely to have any significant market impact.
?? EUR – There was no data of note from the EU yesterday, and there is nothing out today. However, things to take note of are the fact the EU are seriously now discussing how to respond in the case of a no deal Brexit according to the Financial Times, and there are also rumours that the EU may give the UK an extension for when it will leave the EU.
?? USD – Yesterday the Philly Fed manufacturing index was released, and like most US data recently, was better than expected. The weekly unemployment claims were also better than expected at 207k, however due to the regular nature of this data it had minimal market impact.
13:30pm: CPI m/m, Core Retail Sales m/m
Summary: Despite all the recent political uncertainty in the UK weakening the pound, worse than expected retail sales caused the pound to drop further on Thursday morning. This was because it came in far worse than expected at -0.5%. The hot weather and World Cup were seen as the cause for this as it led to higher food and drink sales but kept shoppers away from the high streets. As a result, Sterling was at its lowest level against the dollar since 4th September and an August interest rate rise was thrown in to doubt.
Today public-sector borrowing is being released from the UK, and Canada is in the spotlight with its inflation figures and retail sales due to be released this afternoon.
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