This morning, we saw a slowdown in growth of housing prices month-on-month for the UK. Previous month saw housing prices increase by 0.5% and for this month it was forecasted to not grow at all at 0%, instead we saw a smaller growth of 0.3%. There have been indications that if certain fiscal policies for the housing market are put in place at the autumn budget that housing prices would start to come down, this could be an early indication of the market sentiment expecting taxes to increase in relation to property sells. Annually the housing market is still up by 2.4%.
At the same time this morning Germany released its retail sales, and we can see an improvement month-on-month from -0.5% to 0.2%, the figures came in as forecasted and has not led to market reactions for EUR pairs. Food sales, online business and mail-order services were the three main contributors to an uptrend for the retail sector in German.
In today’s session we do have preliminary core inflation and inflation rate readings from the Euro zone. Forecasting for the annual change for core inflation and inflation levels are both expected to fall by 0.1% to 2.3% (core) and 2.1% for inflation rate. This would be welcoming for Europe and ECB (European Central Bank) who did hold rates on hold yesterday and want economic growth to increase while keeping inflation levels close to its target rates of 2%.
Earlier in the week we had Federal Reserve lower interest rates by 25 basis points. This afternoon we have core PCE and PCE (Personal Consumption Expenditure) released. These indexes measure the level of prices paid for domestic goods and services, and both metrics are expected to be unchanged month-on-month, which would be very welcoming from the Federal Reserve who while lower borrowing costs don’t want to see a price surge leading to inflation levels increasing. US will also release personal income and personal spending, its forecast is unchanged for personal income at 0.4% while personal spending is looking to decrease from 0.6% to 0.4%, suggesting lower confidence from consumers and a willingness to hold onto disposable spendings.
GBP/EUR 1.1343 GBP/USD 1.3130 GBP/AED 4.8266
GBP/AUD 2.0081 GBP/CHF 1.0531 GBP/CAD 1.8395
GBP/NZD 2.2964 EUR/USD 1.1559 GBP/ZAR 22.7366