On Monday very little changed for the pound against the dollar and was trading at $1.3458 in the morning amid geopolitical events and economic data releases.
Talks between Russian and the US and Tuesday’s deadline for the pause in tariffs between the US and China will see investors closely monitoring to see if an agreement is made.
On Tuesday the US will release their latest consumer prices index (CPI) which will also be followed by producer prices index (PPI) on Thursday.
The UK will release employment data on Tuesday and then on Thursday economic growth figures will be published.
Thomas Watts, senior investment analyst at Aberdeen MPS, said, “With the UK labour market having proven remarkably resilient in the face of rising rates and the increase in NIC [national insurance contributions] and minimum wage, the first half of the week will give us the opportunity to check the employment landscape for weaknesses, with both the average hourly earnings index and unemployment claimant count coming out on Tuesday.
Measuring the change in the number of people claiming unemployment related benefits during the previous month, claimant counts can be particularly useful, the figures are crucial in understanding the strength of the overall market as the figures contribute strongly to the unemployment picture.
Giving us a more comprehensive view of the domestic economy, later in the week the ONS [Office for National Statistics] will also release its monthly gross domestic product data, the broadest gauge of economic health,” he added.
With the UK economy having bounced back quicker and stronger than many expected, both those in the City of London and Westminster will hope there are no clouds on the horizon.
Neil Wilson, UK investor strategist at Saxo Markets, said, “CPI is the big one for the Fed – core inflation is expected to rise 0.3% month-on-month in July, with market participants closely watching Fed policy implications.
Core inflation picked up 0.2% last month, with the annual rate moving to 2.9%. The headline rate was 2.7% having risen from 2.4% since April and is expected to hit 2.8%.
“The closer it gets to 3% the harder it is for the Fed,” he said. The Cleveland Fed’s Inflation Nowcasting model CPI at 3% in July and August, too hot for the Fed to ease as the markets price.
