Daily Brief, Oct 16: Economic Events Outlook – CPI and Retail Sales in Focus
On the fundamentals front, the investors will be waiting for U.S. retail sales and U.K. Inflation figures. Let's take a more in-depth look..
Good morning, fellas.
The market seems to trade the risk-on sentiment in the wake of further developments on the US-China trade war. The Chinese Foreign Ministry spokesman confirmed Trump’s comment on striking a “phase one” deal between US & China.
He said that it was true that both parties had reached a partial trade deal. He also said that Beijing had no differences in the account of trade agreement outcomes that were provided by Washington. This statement from China reduced the demand for safe-haven assets, including GOLD, and made a drop in gold prices on Tuesday.
On the fundamentals front, the investors will be waiting for US retail sales and UK inflation figures. Let’s take a more in-depth look:
Watchlist – Economic Events Outlook
It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Economists aren’t optimistic about retail sales this month as the figures are expected to slip to 0.2% vs. 0.5% previously. Considering this, the traders are anticipated to continue trading the dollar with a bearish bias.
USD – Core Retail Sales m/m
Alongside, the core retail sales will also be in focus as it shows a change in the total value of sales at the retail level, excluding automobiles. The data is due at 12:30 GMT, and the retail sales are expected to fall by 0.1% vs. 0.5% beforehand.
The Office for National Statistics will be releasing the UK’s inflation figures. British CPI has been stable at 2% in May, precisely in line with BOE’s target. Economists are expecting no change in the inflation rate this month; thereby, we may also not see any changes from the BOE policy decision and tone.
Statistics Canada is also due to report inflation figures on Wednesday. As you all know, consumer prices account for a majority of overall inflation. Inflation is significant to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. Canadian inflation is expected to take a hit of -0.3% drop in CPI figures vs. 0.4% surge last month amid a surge in the trade war.
Perhaps that’s why the Bank of Canada (BoC) fostered a slightly more cautious tone this week, noting that trade tensions are becoming a more significant threat. The figures may weigh on the Loonie this week.
Good luck, traders. Stay tuned to FX Leaders’ Economic Calendar for live market coverage!
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