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• Archive

UK Data

• Wednesday 9.30am GDP for Q2 previous 3.0%y/y
• Thursday 7.00am Nationwide House Prices for September previous 9.6%y/y
• Thursday 9.30am BBA Mortgage Approval for August previous 67.0k
• Thursday 9.30am CBI Distributive Trades survey for September previous 15.0
• Friday 10.30am GFK Consumer Confidence Survey for September previous -4.0%bal.

Sterling continued to suffer last week from continued turmoil in the credit markets and the story that Northern Rock was forced to go to the Bank of England as the lender of last resort. Further pressure was placed on the UK currency as the outlook for UK interest rates became uncertain following a second successive CPI reading below the BoE’s 2.0% target rate and the release of the minutes from the MPC’s meeting earlier this month. The committee felt that upside risks to inflation had receded somewhat as result of both market turmoil and developments in the real economy. The net result is increased speculation that the MPC will cut rates before the end of the calendar year. This week, the market will once again focus on the housing sector for any signs that prices are beginning to slow and the CBI distributive trades survey following a surprisingly strong retail sales number last month.

US Data

• Tuesday 3.00pm Existing Home Sales for August previous 5.75m
• Tuesday 3.00pm Consumer Confidence for September previous 105.0
• Wednesday 1.30pm Durable Goods Orders for August previous 5.9%m/m
• Thursday 1.30pm GDP Annualised for Q2 previous 4.0%q/q
• Thursday 1.30pm Core PCE Price Index for Q2 previous 1.3%q/q
• Thursday 3.00pm New Home Sales for August previous 870k
• Friday 3.00pm University of Michigan Sentiment Survey for September previous 83.8

Last week saw the Dollar reach a record low against the Euro (1.4120) following the Fed’s decision to cut interest rates by 50bps. The decision follows weaker than expected PPI (-1.4%m/m) and CPI

(-0.1%m/m) highlighting that inflation remains less of a concern than the slowing economy. The other point of note was further signs of weakness in the troubled US housing market with both housing starts (1.331m) and building permits (1.307m) failing to meet the consensus vote. This week, the housing market will be placed under further scrutiny and consumer confidence will also be a big focal point

.

Euro Data

• Monday 10.00am EU Industrial New Orders for July previous 4.4%m/m
• Tuesday 9.00am German IFO (Business Sentiment) Survey for September previous 105.8
• Friday 10.00am EU Flash HICP for September previous 1.7%y/y

Last week saw the Euro continue to remain the dominant force against both Sterling and the Dollar with the single currency seen as the ‘safer’ option in light of the recent credit crunch. The Euro has also escaped the dovish talk that has plagued both Sterling and the Dollar in recent weeks where inflationary pressures appear to be easing. Therefore, the main highlight this week will be Friday’s inflation data where the market will be looking to gauge the likelihood for further tightening in the months ahead.

Interest rate outlook