Will UK wage growth continue its current uptrend?
Eurozone expected to maintain pace of growth
Investors will examine retail sales report looking for signs of weakening demand
Tuesday’s calendar is flooded with top tier macroeconomic readings from world’s major economies. During the European session a report from the UK labour market will be published followed by the EMU GDP reading half an hour later. In the afternoon traders will turn their attention to the US retail sales figures. In the evening oil enthusiasts will be offered a weekly data on oil stocks by API.
9:30 am BST – UK, Labour market report for March. While many macroeconomic indicators from the UK deteriorated greatly in the recent months the data from the labour market remained solid. Especially when it comes to wage as they have shown a healthy growth. This time market consensus points for a little downside against last month’s reading for the headline wages as they are expected to come in at 2.6% versus prior 2.8%. For the core measure (excluding bonuses) economists expect a reading of 2.9% against 2.8%. The unemployment rate is said to remain unchanged at 4.2%.
10:00 am BST – Eurozone GDP for Q1. The European growth slowed somewhat as of late and it was recognized by the ECB’s members. Nevertheless they do not seem to be too concerned about it. This could be seen in yesterday’s Villeroy speech as central banker said that the end of the net asset purchasing programme may still come this year. Today’s reading is expected to show European economy growing at the prior pace of 2.5% YoY and 0.4% QoQ. One should keep in mind that this is a preliminary reading.
1:30 pm BST – US, Retail Sales for April. The latest inflation readings from the US disappointed yet the drop could be accounted to one-off factors. Today’s retail sales print will give investors’ a hint whether the demand is still growing in the world’s biggest economy or has it already reached a peak. A growing demand may spur additional inflationary pressure therefore an upside reading is eagerly expected. Market consensus points for a reading of 0.3% MoM against 0.6% MoM for the headline measure, 0.5% MoM against 0.2% MoM for the core one (excluding cars) and 0.4% MoM against 0.3% MoM for the “core core” one (excluding cars and energy). Simultaneously an Empire Manufacturing index will be released and it is expected to decline from 15.8 pts to 15 pts.
9:30 pm BST – API Weekly Crude Oil Stocks. The rally on the oil market slowed down in the past days showing signs of exhaustion. Nevertheless, this could be just a temporary correction given that the macroeconomic outlook bodes well for the oil bulls. Today’s API report on the oil inventories may provide buyers with additional fuel in case a major draw will occur.
Central bank speakers scheduled for today:
8:25 am BST – Riksbank’s af Jochnick
1:00 pm BST – Fed’s Kaplan
3:00 pm BST – Fed Nominees Clarida and Bowman
GBPUSD remains locked between 50% Fibo level and 8-session moving average. Today’s data pack may result in a more firm price movement. Source: xStaiton5