Daily Market News 15 June 2011

Today's Market Movers

  • In the UK yesterday we saw inflation remain unchanged at 4.5% for June the same as in May, sterling gained 35 pips against the US Dollar and 25 against the euro moments after the figures were released before giving back their gains in mid morning trade. However the BoE still remains concerned that inflation could possibly rise to 5% in the face of rising commodity prices, but given the MPC stern stain on monetary policy would in entertain hike rates if inflation moves above 5%.
  • RPI was the second piece of data released from the UK on Tuesday which came in line with market consensus and really had no real impact on sterling as CPI took centre stage as the biggest piece of information from the UK. Being that the RPI is a widely considered as a key measure of inflation the unchanged number went a long way to show inflation possibly looks like being contained in the short term.
  • There was no major data from the euro zone on Tuesday; however the euro looks to be holding steady against the greenback in recent weeks despite all the problems in the euro zone and Greek default concerns surrounding it, with many investors already pricing in a second default and all three credit rating agencies having downgraded the debt stricken country the writing looks to be on the wall.
  • There were two pieces of data from the United States on Tuesday PPI and retail sales, US retail sales were released to the lower side at -0.2% against the month prior but better against consensus  and were the first decline in 11 months. PPI did on the hand have an increase both on MoM and YoY and were as expected in fairness.  PPI changes are widely seen as a leading indicator of commodity inflation and giving where oil prices and gold are many people weren’t surprised with these figures.

 Yesterday's Market Movers

  • From the UK today is the ILO unemployment rate, where the figure is looking to come in unchanged at 7.7%. Whilst the claimant count rate is also looking to come in unchanged at 4.6% like the unemployment, any lower figure should be sterling positive.  The final piece of the unemployment data is the claimant count change which is looking for a lower number which should hopefully support an unchanged unemployment rate.
  • Data from the euro zone comes in the form of industrial production, where we are looking for a lower number on the YoY and an unchanged figure on the MoM. A higher figure normally indicates an inflationary measure which may anticipate interest rates to rise which might give some sight or forward thinking into the ECB next rate decision.
  • The United States sees the most data of all three economies with CPI, industrial production looking to be released.CPI is looking to come in line at 3.2% which should support the notion that rates will remain on hold in the short term. However industrial production should support a different notion as the MoM figure is looking for an ever so slight increase.