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Market Update

UK house prices rose 11% against last Augusts figures, climbing closer to Pre-Pandemic levels, bringing some levels of positivity for The UK’s economic recovery. It is thought that although The Stamp Duty Holiday came to an end for higher bracket priced houses back in June, houses falling under the £250,000 or less bracket was the driving factor behind the strong performance for August. A lack of supply of properties is thought to also have contributed to the rise in prices, and the sentiment moving forward suggests demand will likely remain solid with consumer confidence recovering, borrowing costs remaining low for now and the possibility of a lack of supply.

The only key data of any note for The UK is PMI releases over the next 4/5 days, if anything any major developments with The U.S. or Europe surrounding Employment figures will influence GBP against the majority of currencies in one direction or another.

German unemployment earlier in the week showed slight improvement, and along with inflation for The Bloc hitting 3% The ECB along with other Central Banks seem to be comfortable with a slight over-run of their standard 2% target as long as this is only a temporary result. Retail Sales however underwhelmed, detracting by nearly 4% in July compared to 2020, and although 70% of Europeans have now been double-jabbed, raising hopes for a clearer economic recovery in the coming months, business confidence across a number of sectors seems to be waning with concerns around chain delays and pressing supply issues.

Since last week’s lack of clarity from The Fed Reserve regarding monetary policy, The U.S. Dollar has come under some pressure with the main focus now cemented on employment data. Non-Farm Payrolls due out Friday suggest over 200,000 less jobs will have been created last month in comparison to July. Non-Farm Payrolls is the most volatile piece of data in the economic calendar and usually always surprises analysts and traders. With that in mind, any surprise in either direction should impact on the currency with all eyes from The Fed taking a close look at Payrolls as well as weekly jobless figures due out tomorrow.

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