Good afternoon,
This morning’s September UK Retail sales reading unexpectedly fell for the fifth straight month with a month-on-month reduction of 0.2% despite the panic buying related 2.9% increase in petrol sales. This has started to show signs that the UK’s economic recovery is slowing with household spending at non-food stores being the key driver.
Yesterday’s US jobless claims came in below expectations at 290k new claims versus an expected 300k and 6k less than the previous week. This should transcend to a stronger labour market reading for October as some of the unemployment benefits in the US have now ended.
With both the UK Retail sales and US jobless readings, cable currently sits at the 1.3800 level after an initial dip lower after the retails sales reading was released first thing this morning. The dollar is keeping EUR-USD down at the low 1.16 level as it continues to provide good reading.
Lastly, the Turkish Central Bank has gone ahead with a 200 bp rate cut which has shocked markets, following on from their 100bp rate cut in September. The rate cuts are being applied despite rising inflation which goes again most other central banks at this time. The lira has already lost 20% to the USD this year and fell a further 2% to fresh all-time lows as USD-TRY approaches 10:1 with further depreciation looking likely.
Have a great weekend.
Chris Allan, Senior Relationship Manager
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