After an uneventful start to the week, the UK’s data prospects should be a bit livelier as the week progresses – labour market releases should offer some insight into the health of the sector this week. We have seen low price pressures given as a cause for concern by the MPC – today’s CPI figure should provide insight into whether or not previous action taken to rectify these problems has, indeed, had an effect. What is also hoped for is that we’ll see evidence of an upswing in UK productivity data later this week – this is an important (and needed) element in seeing an improvement in overall economic growth.
With a number of public holidays seen in major markets yesterday, Europe was quiet, but it didn’t stop the euro from edging closer to monthly highs against the dollar – some of this strength is based on predictions that an interest rate for the US will only come next year now. The VW scandal is still having an impact as it’s now emerging that the European Investment Bank might pull financing as a result of the problems VW is facing/has caused. In terms of Eurozone data today, we’ll see German ZEW economic figures out which are expected to come in below September’s level of 12.1 at 6.8.
Across the Atlantic, the US was on holiday so we didn’t get to see any data releases of note. This had a negative impact on the dollar as it lost ground against the pound (0.5% over the course of the day). There isn’t too much coming out in terms of data today – we’ll see the monthly budget statement released later this evening – but tomorrow’s retail sales numbers are what the markets are really looking forward to.
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