Employment data, inflation figures and a public appearance by Mervyn King are the highlights of this busy week in the weak Pound. Here’s an outlook for the British events and an updated technical analysis for GBP/USD. Report from Forex Crunch
Dear fellow traders this is one story every one of us most look into if you are to succeed i trading the beast this week, enjoy your trading. GBP/USD daily chart with support and resistance lines marked. Click to enlarge:
The rate decision in the past week didn’t provide any excitement. We’ll now get to see if there is any justification for any moves on the rate in the near future. Probably no need for hikes:
1. Nationwide Consumer Confidence: Publication time unknown at the moment. This important survey of consumers always rocks the Pound, despite the strange release time. After reaching a peak of 81 points, this indicator gradually dropped, going down to 56 points last month. A small rise to 59 points is expected now.
2. RICS House Price Balance: Published Monday, 23:00. This indicator shows the balance between areas that are reporting rises in real estate prices and areas which are showing drops. After many positive months, with a peak of +35%, the figure deteriorated and fell to a negative number last month, -8%. This means that house prices are falling in most areas. Another drop is expected now to -11%.
3. CPI: Published Tuesday, 8:30. British inflation has been above the government’s target during most of the year. Andrew Sentance, a member of the MPC, wanted to raise the interest rates to tackle this issue, but Mervyn King, the head of the BoE, dismissed it, and saw inflation sliding back into the 1-3% target. After CPI dropped to an annualized figure of 3.1% last month, it might fully return into range now. Expectations stand on 2.9%. Core CPI is already at 2.6% as of last month and will probably remain unchanged. Retail Price Index (RPI) still high and stands at 4.8%, also lower than the months beforehand. Any figure in the CPI will rock the Pound.
4. Employment data: Published Wednesday, 8:30. After a few great months, the Claimant Count Change, which measures the change in the number of unemployed people, dropped by only 3800 people, sending the Pound down. The fresh figure, for the month of August, will probably be better, -5800. The unemployment rate is expected to remain at 7.8% for a third month in a row. Note that the figure is for July, thus having less impact. The Average Earnings Index will complete the picture with an expected 1.6% gain.
5. Inflation Report Hearings: Begins Wednesday, 9:00. Mervyn King, head of the BoE and some of his colleagues, will appear before the Treasury Committee in the British parliament. This public event takes a few hours – a long time in which the Pound shakes. Apart from talking about inflation (released one day earlier), the members of the BoE will also discuss the state of the economy and the prospects for the future.
6. Retail Sales: Published Thursday, 8:30. This major consumer report has shown neat growth in the past 6 months, usually exceeding expectations. Last month’s excellent 1.1% rise will probably followed by a more modest rise this time, only 0.3%.
7. Consumer Inflation Expectations: Published Thursday, 8:30. This report by the Bank of England is based on a survey of 2000 consumers. Despite being slightly overshadowed by the retail sales figure released at the same time, this indicator tends to have a strong impact. The drop in annual CPI wasn’t felt in this survey – last month’s figure showed a strong rise in inflation expectations – from 2.5% to 3.3%. A drop is predicted this time.
8. CBI Industrial Order Expectations: Published Thursday, 10:00. Closing the week for the Pound, this survey of 550 manufacturers will probably remain in negative territory once again. A negative score means that manufacturers expect a lower sales volume in the future. The figure has been negative for ages, but it has been improving, reaching -14. It’s expected to remain at a similar level now, but it might post a small improvement.
Please this Report help make a comment
