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Barry Norman

Analysis and Recommendations:

The GBP/USD dipped 56 points today to trade at 1.5347 well of its high this week at 1.57.  Economists have said the boost to trade might be temporary, because the persistent strength of sterling is making British goods more expensive abroad, while turmoil in Chinese financial markets has increased uncertainty about the global outlook.

Business investment rose 2.9% compared with the first three months of 2015 – the highest figure in a year. Samuel Tombs, senior UK economist at Capital Economics, said the figure “put paid to the idea that uncertainty about the general election would weigh on capital expenditure”.

Household spending increased by 0.7%, but was lower than the 0.9% rise in the first quarter. Weak inflation, low interest rates and a strong pound have helped to keep consumer sentiment buoyant.

The UK economy expanded by 3% last year in its best result since 2006. The Bank of England expects the same momentum to be maintained this year, forecasting 2.8% growth.

“With growth in households’ real incomes set to remain supported by low inflation, building wage growth and strong job creation, we continue to think that the economic recovery will sustain its current pace in the second half of 2015,” Mr Tombs said.

Business investment was also up strongly, growing 2.9 per cent quarter on quarter, in a promising sign for UK growth prospects and productivity. George Buckley, chief UK economist at Deutsche Bank, said the details were “encouraging” but cautioned that the growth in exports might weaken given global economic uncertainties.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases:

Cur.

 

Event

Actual

Forecast

Previous

 

  JPY

 

Household Spending (YoY) (Jul)

-0.2%

1.3%

-2.0%

 

 

  JPY

 

Household Spending (MoM) (Jul)

0.6%

2.2%

-3.0%

 

 

  JPY

 

Jobs/applications ratio (Jul)

1.21

1.19

1.19

 

 

  JPY

 

National Core CPI (YoY) (Jul)

0.0%

-0.2%

0.1%

 

 

  JPY

 

Tokyo Core CPI (YoY) (Aug)

-0.1%

-0.2%

-0.1%

 

 

  JPY

 

Retail Sales (YoY) (Jul)

1.6%

1.1%

0.9%

 

 

  CHF

 

GDP (YoY) (Q2)

1.2%

0.9%

1.2%

   

  CHF

 

GDP (QoQ) (Q2)

0.2%

-0.1%

-0.2%

 

 

  EUR

 

Spanish CPI (YoY) (Aug)  

-0.4%

-0.1%

0.1%

 

 

  EUR

 

Spanish HICP (YoY) (Aug)  

-0.5%

-0.2%

0.0%

 

 

  GBP

 

Business Investment (QoQ) (Q2) 

2.9%

1.7%

2.0%

 

 

  GBP

 

GDP (YoY) (Q2)  

2.6%

2.6%

2.6%

 

 

  GBP

 

GDP (QoQ) (Q2)  

0.7%

0.7%

0.7%

 

 

  EUR

 

German CPI (MoM) (Aug)  

0.0%

-0.1%

0.2%

 

 

  USD

 

Core PCE Price Index (YoY) (Jul)

1.2%

1.3%

1.3%

 

 

  USD

 

Core PCE Price Index (MoM) (Jul)

0.1%

0.1%

0.1%

 

 

  USD

 

Goods Trade Balance (Jul)

-59.12B

 

-62.26B

 

 

  USD

 

Personal Spending (MoM) (Jul)

0.3%

0.4%

0.3%

   

  CAD

 

RMPI (MoM) (Jul)

-5.9%

-4.0%

0.2%

   

 

Upcoming Economic Events that you should be monitoring:

Monday, August 31, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

 

 

 

United Kingdom – Summer Bank Holiday

  NZD

 

Building Consents (MoM) (Jul)

 

 

-4.1%

 

 

  JPY

 

Industrial Production (MoM) (Jul)

 

 

1.1%

 

 

  AUD

 

HIA New Home Sales (MoM) (Jul)

 

 

 

 

 

  AUD

 

Company Gross Operating Profits

 

 

0.2%

 

 

  AUD

 

Private Sector Credit (MoM) (Jul)

 

 

0.4%

 

 

  CHF

 

KOF Leading Indicators (Aug)

 

 

99.8

 

 

  EUR

 

CPI (YoY) (Aug)

 

0.2%

0.2%

 

 

  CAD

 

Current Account (Q2)

 

 

-17.5B

 

 

  USD

 

Chicago PMI (Aug)

 

54.5

54.7

   

Government Bond Auctions

Date Time Country

Aug 28 11:10 Italy Auctions BTPs/CCTeus

Sep 01 11:15 Austria Holds RAGB bond sale

Sep 01 00:00 UK Announces details of 3.5% 2045 Gilt

Sep 02 11:03 Sweden Holds bond auction

Sep 02 11:30 Germany Eur 4bn 0.25% Oct 2020 Bobl

Sep 02 11:30 UK Auctions new Jan 2021 Gilt

Sep 03 10:30 Spain Auctions Bonos/Obligaciones

Sep 03 11:10 France Auctions OATs

Sep 03 00:00 US Announces details of 3yr note on 08 Sep, 10yr note on 09 Sep

Sep 03 00:00 US Announces details of 10-year note on 09 Sep

 

 

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