Currency news

Markets await key US inflation and Retail Sales data

Thanim Islam
Profile
Head of FX Analysis at Equals Money
-
3
min read
Publish date
15/05/24
    • Cooling jobs market
    • German business sentiment picks up  
    • US Producer Price Inflation remains hot, CPI in focus


    Yesterday's currency recap

    The dollar drifted lower in yesterday’s session as markets await today’s key US inflation report. Sterling was largely unchanged after UK employment data showed April’s payroll numbers fell larger than forecast, but wage growth remained stubbornly high. BoE member Huw Pill provided further hints that a rate cut could come as early as June as will. The euro made gains after the latest ZEW Economic Sentiment Index came in higher than expected, indicating the German economy is showing early signs of recovery.

    Elsewhere tensions between the US and China increased after the US announced sharp tariff hikes on Chinese imported goods, including a hike on Electric Vehicles from 25% to 100%.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD 0.03% 1.9007
    GBPCAD 0.11% 1.7184
    GBPCHF 0.04% 1.1413
    GBPDKK -0.03% 8.6814
    GBPEUR -0.03% 1.1636
    GBPJPY 0.40% 197.0080
    GBPNOK 0.27% 13.6210
    GBPNZD -0.05% 2.0862
    GBPSEK 0.10% 13.6299
    GBPUSD 0.22% 1.2588

    *Daily move - against G10 rates at 7:30am, 15.05.24

    ** Indicative rates - interbank rates at 7:30am, 15.05.24

    Key data points

    Currency Event Period Consensus Previous
    EUR EU GDP Q1 0.30% -0.10%
    USD Mortgage Applications May/10 N/A 2.60%
    USD Core PPI MoM Apr 0.20% 0.20%
    USD Core Inflation rate Apr y/y 3.60% 3.80%
    USD Headline Inflation Apr y/y 3.40% 3.50%
    USD Retail Sales m/m 0.40% 0.70%

    Upcoming speeches

    • EUR: ECB Rehn, Muller, Villeroy, Makhlouf
    • USD: Fed Bowman, Kashkari

    What we think

    We start the day with the first readings of Q1 GDP for Europe, expected to show growth up to 0.3%. A strong reading here could well lead to markets pricing in less rate cuts later on this year, which should be beneficial for the EUR. Focus then falls on the US with the release of CPI and then retail sales. Core CPI is expected to come in marginally lower in April and if so, then expect further weakness on USD, which has been sensitive to soft US data so far this month.

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    About the author
    Thanim Islam
    Profile
    Head of FX Analysis at Equals Money

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