15th November 2019 Market Update
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🇬🇧 GBP – Sterling toyed with a new 6 month high versus the euro on the back of continued optimism and odds of Conservative majority government. Last Friday, implied odds were at 40% but have now risen to 63% as opinion polls continue to put the Tories ahead of Labour.
On the economic front, retail sales growth slowed surprisingly despite heavy discounting by retailers – sales volumes dropped by 0.1%, however the data had no impact on the pound.
Whilst sterling remains well supported, several analysts have warned that the pound may well be overbought and that its not a foregone conclusion that the Tories will gain a majority despite the polls suggesting so. Adam Cole, FX strategist at RBC Capital Markets commented “It would take a strong showing in only a small number of seats to remove the majority that most seem to expect”.
🇪🇺 EUR – Data yesterday showed that Germany marginally avoided a recession with the economy growing by 0.1% in the third quarter. Growth figures in the whole single-bloc came in greater than expected at 1.2%.
Inflation figures are due today with markets expecting inflation to remain at 0.7%
🇺🇸 USD – No major news out of the US yesterday but we did the Dollar dip thoughout the course of the day.
Retail sales are due today with markets expecting an increase in sales by 0.2%
GBP: GBP still supported by opinion polls
EUR: Germany avoids recession
USD: Retail sales in focus
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