The main news out from the UK on Friday was that retail sales for the UK missed expectations. Month-on-month retail sales came in at -1.5% which is always expected to be less than in December due to people spending more over the Christmas period. There had been expectations of a fall of 1%.
The pound had its biggest weakly drop in 3 months on the back of this data, rising unemployment rate and inflation slowed, slowing a bit of the momentum that the UK economy is recovering fast.
the USA data continued to disappoint with existing home sales missing
expectations with a fall of -5.1% compared to expectations of a fall 4.3%.
The main news out today will be the inflation data from the Eurozone. CPI is expected to fall from 0.8% to 0.7% year on year. If this does happen it will only increase pressure on Draghi to introduce negative deposit rates. There next policy meeting is on the 6th March where they will decide in this.
In the US today we have services data and manufacturing data out. Services are set to improve over the month of February whilst manufacturing is set to fall for February.
Outlook for the week
The focus for the UK this week is the GDP figures out on Wednesday. Expectations are the UK economy grew slower in the most recent quarter at 0.7% compared with 0.8% previously. Some of this can be attributed to the poor weather conditions we have seen in the last couple of months.
10:00am – EUR – Consumer Price Index (Jan): Expected to fall to 0.7%.
13:58pm – USD – Markit Services (USA): Expected to increase to 56.9.
15:30pm – USD – Dallas Fed Manufacturing Business Index: Expected to fall to 3.