Last week for the UK saw inflation fall to its lowest level of 0.3%, while unemployment dropped by 38,600 (5.7% total) - the lowest level since the end of 2008. The MPC also voted last week to keep interest rates where they are. Average earnings we also seen to rise by 2.1% last years which is the biggest jump since 2013. There isn’t too much out the week in terms of data; it’s more the turmoil and uncertainty surrounding Greece that will play a part in pound’s fortunes. Aside from that, we’ll see second estimate GDP (quarter on quarter) out which is expected to drop to 0.5% - if this comes to fruition then it’ll be the 2nd biggest drop since May’13.
On the mainland, Europe has been somewhat tense with the on-goings with Greece and its possible exit from the Eurozone over its want to forego pre-election debt repayment programmes. With that situation still being currently resolved, eurozone ZEW economic sentiment was seen to rise for Feb, while Germany’s sentiment was seen to dip. France’s inflation was also see to dip into negative territory for the first time in five years. All eyes will be on Greece tomorrow to see if reforms will be approved or not. It’s all about a 4 month extension in deciding on a future course and whether reform for the ailing country will be accepted or not. German business climate and economic data will be out today and tomorrow which should offer a boost to EUR if things go positively.
With the US taking the day off on Monday to celebrate its presidents, there wasn’t much data Stateside to kick the week off. It seems the Fed will most likely push back an interest rate rise until late this year. Manufacturing data also came in somewhat weaker for the dollar last week so, despite USD having had a strong start to the year, last week was a something of a back pedal. This week sees consumer confidence data out tomorrow, then Janet Yellen speech in the evening which should prompt some market moving commentary. New homes sales data is then out on Wednesday, with GDP data release on Friday.
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