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UK jobs data & US inflation - the key events to watch out for this week..

GBP

It has been two consecutive weeks of decline for GBP v EUR. Mid-market has seen a high of 1.1720 and a low of 1.16 within the time-frame. Two weeks prior, it was 1.1730-1570. A volatile, but nonetheless consistent swing.

Sterling is currently trading at the bottom of the above trading trend, but overall towards the top of its trading range. This suggests any movement up from here is a buy, especially when you have to go back to September 2022 to find the mid-market rate above 1.1760.

To have any chance of seeing a 0.5%+ uplift, the UK will have to produce a weaker than expected jobs report. The labour market (crucially wages) is important to the BoE to determine the overall state of play with inflation. The last 2-months has seen sticky wage inflation, so there is a chance that the Pound gains tomorrow if it remains the same. But consensus is saying otherwise..



EUR
As expected, it was another week of gains for the single currency, this time playing the 'sitting duck' role. As-well-as gaining for two consecutive weeks versus Sterling, the Euro has now gained for four consecutive weeks against the Dollar. 

Nearly 1.5% has been made versus the Dollar in the last month, which was badly needed after a punishing beginning to April. The Euro has gained over 0.5% against Sterling in the same time-frame. GDP is the main event for the Euro-Zone this week and it's expected to be a positive result and therefore further strength could be incoming for the €.



USD
Recent weakness in the Dollar has come on the back of softer than expected US economic data, suggesting its strong run of data-beating results is finally fading. There has been a slow, but steady pullback from the Euro, but only a 0.5% loss versus the Pound in the last month.

The dollar remains strong and ready to pounce at any moment it seems, unless market expectations start rising for a Fed interest rate cut in the coming months. We expect a volatile week for those invested in the $, as inflation data spans over two consecutive days with Fed Chair Powell speaking in-between. 

Upcoming Data
Monday 13th May 2024
N/A 



Tuesday 14th May 2024
07:00 UK - Employment change, unemployment rate & average earnings
08:30 UK - BoE Pill speech

10:00 EU - Euro-Zone & German economic sentiment index
10:00 EU - European commission spring forecast
13:30 US - PPI
15:00 US - Fed Chair Powell speech


Wednesday 15th May 2024
08:30 EU - Dutch GDP
10:00 EU - Euro-Zone GDP & industrial production
12:00 US - Mortgage applications 
13:30 US - Inflation rates & retail sales
15:00 US - Business inventories & housing market index
21:00 US - Long-term TIC flows

Thursday 16th May 2024
05:30 EU - Dutch unemployment rate
09:00 EU - ECB financial stability review
09:00 UK - BoE financial stability report
10:00 EU - Italian balance of trade
13:30 US - Initial/continuing jobless claims, building permits & housing starts
14:15 US - Industrial production




Friday 17th May 2024
06:30 EU - French unemployment rate 
09:00 UK - BoE Mann speech
15:00 US - Leading index