UK CPI, German economic sentiment and more

19 January,, Lagos – The day has already commenced with key data from China. The world’s second largest economy has again shown a stiff struggle in its transition to consumer-led expansion as China’s economy slowed in December, marking the weakest quarter of growth since the 2009 global recession. Industrial production, retail sales and fixed-asset investment all slowed at the end of the year, while gross domestic product rose 6.8 percent in the fourth quarter from a year earlier. However, the full-year growth of 6.9 percent, the least since 1990, was in line with the government’s target of about 7 percent.

Volatility in the currency markets is set to resume as US banks reopen after the observation of holidays on the Martin Luther King day. Today can be tagged the “inflation report day” as we have the consumer price index (CPI) data due from the UK and New Zealand.

UK CPI (9:30 A.M GMT)

Following the Bank of England’s decision to maintain interest rate at around seven year lows at 0.5% and that doesn’t look set to change any time soon. The central bank has shown concern over the slump in oil, worries about China, mounting risks from the U.K.’s European Union referendum and the World Bank cut in growth forecasts. The UK CPI to be released today is forecast to remain at 0.1%, putting it well below the BoE’s 2 percent target. And with the plunging oil prices, this is unlikely to pick up anytime soon.

The sterling remains in its downward plunge, currently struggling to break below a six year low against the dollar around 1.42282. A break of this zone could open up further downside potential.

German ZEW Economic Sentiment (10.00 A.M GMT)

Following the consistent dip in the German ZEW Economic Sentiment from the beginning of 2015, the index which gauges German institutional investors’ and analysts’ relative 6-month economic outlook for the country rebounded in November. The economic sentiment is however forecast for another drop down to 8.2 from 16.1 as the refugee crisis threatens the stability of the nation and Europe at large. We also have the Final CPI y/y and Eurozone ZEW Economic Sentiment due alongside.

New Zealand CPI q/q (9:45 P.M GMT)

New Zealand’s inflation is forecast to fall to -0.2% from 0.3%. The GDT Price Index is also due latter today. Negative reports from these will put more pressure on the NZD following the plunge in the currency in recent weeks.

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