For the 2nd month in a row, UK inflation was seen to sit at 0.0% which, ultimately, is a record low and creates worry amongst the market that there won’t be an interest rate rise from some time still. Inflation worries were also applied pressure with average earnings increasing by less than expected. We did, however, see a drop in benefit claims last week – from 29,000 to 20,700 – from November until now. Midweek we’ll see BoE meeting minutes released which usually offers some decent insight into what central bank members are thinking. On Thursday we’ll see retail sales data which is expected to not be that great although still in positive territory.
Last week, the ECB decided to keep the European interest rate on hold at 0.05%, while Greece continued to pose an issue in terms of its debt repayments. Data-wise, we’ll see German ZEW economic sentiment tomorrow which is anticipated to come in the best level since Jan’2014. Thursday we’ll see manufacturing and services PMI data from France and Germany.
Across the Atlantic, poor retail sales had USD on the backfoot, PPI inflation hit positive territory (at 0.2%) for the first time since Nov’14, while a dip in Chinese GDP hit the dollar as well. There was more bad news by way of underperforming building permits along with an increase in unemployment claimants.
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