Important data week ahead

UK labour numbers also eyed this week..
It was a strong recovery week for Sterling last time out, that was very much a surprise on the market. A clear 1% was won back against many currencies, meaning the Pound was likely to have been pushed into overbought territory the week before. Something that is easily achievable when there is heavyweight data released.

After lying low last week, the UK is back with some key figures this week and so you can bet there will be volatility. The inflation number is interesting because consumers will want to see it come down, but a higher number will represent good news for the Pound. This is because a 'stickier' figure will mean the BoE must do more in terms of rate hiking.

Before that release though, we have UK labour data which will be watched closely tomorrow morning. Traders will be looking for potential trends in a softer demand for workers and whether wages are growing more modestly. The unemployment rate will also be important tomorrow to see if it is edging higher. 

Tomorrow's GDP number looks like it may be a non-event and so the scheduled central bank member speeches may be the only data of note for the Euro-Zone this week.

Not necessarily a bad thing for Euro sellers, seeing how the Pound performed last week with little-to-no economic data. This means the € will be moved by events elsewhere and so depending on those outcomes, it may be another tough week for the single currency.

It's a big week for the US as we find out whether disinflation is successfully underway or not. Inflation has been easing in recent months and there is cautious optimism that a disinflation process is firmly underway. Meaning, interest rates do not need to be hiked any further.

We expect to see £-$ strength if all goes to plan this week, but a reversal below 1.20 mid-market if the inflation number stalls in anyway. So a bit of a risk event for the pair tomorrow afternoon. US retail sales and jobs data will also play their part in what is an interesting week on the market.