14/12/16 - UK's Inflation On The Rise

GBP

The Pound strengthened yesterday morning after the UK’s inflation rate beat expectations and rose to 1.2%, driven up by hikes in clothing prices, motor fuels and a "variety of cultural goods and services", according to the Office for National Statistics (ONS). However, food and non-alcoholic beverages pulled inflation down.
 
The ONS said it was the first time since mid-2014 that all non-food categories had an upward effect on inflation and that inflation is likely to keep rising after the world's major oil producers agreed to cap production.
 
The figure puts the UK nearer to the Bank of England’s 2% target, however analysts suggested governor Mark Carney is unlikely to react to today's news as weak Sterling is likely to push inflation to 3% next year.
 

EUR

The ZEW economic survey revealed positive sentiment for German economic conditions in December, suggesting Europe’s largest economy is still performing well and that economic growth there could even be accelerating.
 
The ZEW Indicator of Economic Sentiment for Germany came in at 13.8 points, marginally lower than the 14.0 expected and unchanged from November. The figure was viewed a positive and supported the recently published positive GDP growth figures for the Euro area in the third quarter. However analysts warn of the considerable economic risks arising from the tense situation in the Italian banking sector, as well as the political risks surrounding upcoming elections in Europe, seem to have faded into the background at the moment.
 

Key Announcements

09:30 – GBP – Average earnings index is expected to remain at 2.3%

09:30 – GBP – Claimant count change is anticipated to decrease to 6.2k

12:15 – GBP – BOE Gov Carney Speaks

13:30 – USD - Core Retail Sales is forecast at 0.4% from 0.8%

13:30 – USD – Producer Pricing Index is expected to increase to 0.1%

13:30 – USD – Retail Sales is forecast to decrease to 0.3%

15:30 – USD – Crude Oil Inventories

19:00 – USD – FOMC economic projections

19:00 – USD – FOMC Statement

19:00 – USD – Federal Funds rate is expected to increase to 0.75%