21 Mar

GBP conserves advanced Highs & Lows before UK CPI Release

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Today's Key Events for Market Watch

GBP - CPI y/y @03.00 pm
CAD - Core Retail Sales m/m @06.00 pm
NZD - GDT Price Index
*All Timings are in Indian Time Only (GMT +05.30)
UK CPI-Consumer Price Index to beat 2 percent Target for 1st Time Since 2013.
Core Rate of Inflation to mount Annualized 1.7 percent; best ever rate Since August 2014.
BOE Governor Carney Speaks
Above-target price rises might spark a growing rift within the MPC-Monetary Policy Committee after the 8 to 1 vote in March, but the conflict might be short lived with board member Kristen Forbes programmed to leave the central bank at the last part of June. By means of that said, Governor Mark Carney might carry on tame interest rate expectations & repeat monetary policy can react, in whichever direction as PM Theresa May plans to activate Article 50 of the Lisbon Treaty on March 29. The UK’s departure from the EU-European Union could heighten the bearish sentiment nearby the British Pound particularly as Scotland shows to be on path to hold a 2nd referendum & restore fears of a hard Brexit can drive the central bank to additional support the real economy as the Committee anticipates a slowdown in collective demand more the course of this year.
Improved business assurance along with the fresh uptick in private-sector lending could offer a meaningful boost to UK price growth & a stronger-than-expected CPI report might advance a bullish reaction in the Pound as it puts force on the BoE to regularize monetary policy earlier rather than later.

EVENTS                                                                    Expected        Actual
Net Consumer Credit (JAN)                                      1.4B               1.4B
Lloyds Business Barometer (FEB)                           --                    40
Producer Price Index Core- Output (YoY) (JAN)    2.2%              2.4%
yet, subdued wage growth balancing with the weakness in household spending may well encourage UK firms to offer inexpensive prices & another below-expectation print can trigger short-term headwinds for sterling as it drags on interest-rate outlooks.
EVENTS                                                                      Expected         Actual
Average Weekly Earnings (3MoY) (JAN)                 2.5%               2.3%
Gross Domestic Product (YoY) (Q4)                          2.2%               2.0%
Retail sales Auto Fuel (MoM) (JAN)                          0.7%                -0.2%
Impact that the UK CPI report has had on GBP during the last release:-
For the Month         Released          Expected    Actual      PIPS change
January 2017         14 Feb. 2017       1.9%          1.8%           -52
The UK CPI mounted an annualized 1.8 percent in January to mark the greatest pace of growth since June 2014, whereas the core rate of inflation unpredictably held stable at 1.6 percent per annum for the 2nd month in January. A deeper appears at the report showed the weaker-than-predicted publish was better drive by a 0.5 percent decrease in prices for food & beverage, though Transportation costs raising an annualized 5.7 percent on the rear of superior energy prices. The Pound resisted holding its floor following the weaker-than-expected issue, with the GBPUSD pair slipping under the 1.2500 levels switch to finish the day at 1.2466 levels.
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