UK CPI and US retail sales on the calendar

15 September,, Lagos – The week started out quiet in terms of fundamental releases. Although, no shortage of volatility is expected in days to come as we have the Federal reserve interest rate decision. An event which the world awaits keenly to see if the US central bank will finally lift rate from near decade lows.

RBA Monetary Policy Meeting Minutes

Australia central bank’s monetary policy meeting minutes was released earlier today. Some of the key aspects touched in this document are stated below. Speaking of financial markets, it was noted that much of the volatility had occurred in equity markets, with fixed income and foreign exchange markets generally exhibiting less volatility.

Non-mining business investment was still expected to pick-up over time as a result of the depreciation of the exchange rate over the past year and a further gradual rise in household expenditure. Low interest rates would continue to support growth in dwelling investment and household consumption. All of these and other factors informed the board’s decision to leave rates unchanged at 2.00%.

UK CPI (8:30 A.M GMT)

By 8:30 A.M GMT, the consumer price index which measures the change in the price of goods and services purchased by consumers is considered the UK’s most important inflation data because it’s used as the central bank’s inflation target. The CPI has toggled around deflationary region for a few months now, falling to -0.1% back in May.

Last month, the inflation rate unexpectedly rose to 0.1%. Even though this remained well below the Bank of England’s target of 2.00%, the market still perceived this as positive, sending the sterling higher at the time of release. The figure to be released today is forecast for a fall back to 0.0%. The pound has gained against the dollar in the past few day. A surprise higher reading than forecast may be a catalyst for the continuation of this run with greater momentum.

German ZEW Economic Sentiment (9:00 A.M GMT)

Based on this data, confidence in the German economy has been falling consistently for the past six months. Largely attributable to geopolitical and global economic circumstances. It is forecast to come at 18.5%, potentially the lowest level since October, 2014. The Euro gained for seven days back to back, and looks on course for further strength. A better than expected reading here is expected to fuel the bullish run on the Euro.

US retail sales (12:30 PM GMT)

The change in the total value of sales at the retail level being the earliest and broadest look at vital consumer spending data will be keenly watched. More so as we expect the rate decision from the Fed on Thursday. Last month, sales at U.S. retailers rose in July on growing demand for everything from cars to clothing, and a decline the previous month was wiped away, signaling consumers are propelling growth in the world’s largest economy.

Rising employment, stronger finances and still-cheap fuel is helping draw consumers into stores and auto dealerships. Growth in household spending, which accounts for about 70 percent of the economy, is showing a green light for the Fed to lift rates. Considering that the labor conditions are also showing strong positives. The previous retail sales figure came at 0.6%, while the core retail sales which excludes automobiles sales came at 0.4%. Last month’s figures are forecast to come at 0.3% and 0.2% for the retail and core retail sales respectively.

New Zealand GDT Price Index (Tentative)

We also have the GDT Price Index from New Zealand which measures the change in the average price of dairy products sold at auction. An important figure since the economy is highly dependent on sales of dairy products.

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