Thanks goodness, we have some news worth trading this week. With the housing market looking very vulnerable in the US there will be even greater emphasis being placed on the Home sales figures out this week. Of course we should also be very aware of the volatile Durable Goods Orders and even more so on Kev’s favourite, the FOMC day on Thursday.
After last week’s jamboree, we take a breather this week, with only the BoE minutes being of real interest as we look for direction to how the committee voted and their thoughts re inflation and any further interest rate increases. As it is such a quiet week, we will no doubt see some movement in the currency markets at the slightest sneeze as traders look for direction. We will have to look to Canada (Tuesday 12:00 - CPI result result & Thursday 13:30 - retail sales) for some excitement.
The slowdown in spending in the US has halted with a bang. Retail spending came in well ahead of expectations hitting a multi-year high at 1.4% growth. It might appear that the US consumer is helping with yet another get out of jail card, but we will have to see if the increase in retail sales continues or whether this is just a timely blip.
Once again we have inflation and retail sales week in the UK and US. We have kicked off the week with the UK Producers Price index which showed that the cost of goods into our factories is increasing at twice the rate forecast and the rate of inflation on goods leaving the factories remained in line with forecast, at plus 0.4%.
There were no clues to how the members of the Bank of England are thinking when the interest statement was released, it simply read…
The week starts of relatively quietly although the main focus of the week will be on the ECB and BoE interest rate decisions. It is widely expected that the ECB will increase the base rate to 4.0% and the BoE will leave the rate unchanged on this occasion, although a further rate increase later this year has already been flagged. If the UK rate increase comes early, i.e. this month we may see quite a reaction in the forex markets.
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