As the week begins, GBP/USD is the main story, rising above 1.30 on hopes of a U.K.-E.U. Brexit deal. The week ahead is full of economic events and central bank meetings that will surely move the currency pairs.
UK jobs report Tuesday
Sterling is on the up and up Monday after better-than-expected GDP numbers for August and hopes of a Brexit deal.
Chief negotiator for the E.U. Michel Barnier said it’s likely that the E.U. and the U.K. could reach a Brexit deal in six to eight weeks.
On Tuesday, we’ll see how the jobs report out of the U.K. sways the pound. Average earnings for the three months ending in July are expected to rise to 2.5% growth compared to 2.4% previously.
The unemployment claimant count is expected to be 3.6K in August, compared to 6.2K the month before.
US PPI headlines quiet Wednesday
The producer price index for August will be the major event on Wednesday.
The PPI number for August, which follows industrial production for the E.U., is expected to increase to 2.8% year over year excluding energy and food.
Including energy and fuel, the PPI number is expected to decline slightly to 3.2% from 3.3% the previous month.
Central bank decisions Thursday
The European Central Bank and the Bank of England will hold their monetary policy meetings and interest rate decisions Thursday.
Both banks are expected to hold rates steady. However, there will be a lot of interest in the language of the statements released.
The ECB has previously said it won’t increase rates until September 2019. Any indication of bumping up that date could boost the euro.
Key US data rounds out the week
Also on Thursday, the consumer price index for the month of August is due.
The inflation figure will be closely watched to see if it will increase the chances of a rate hike by the Federal Reserve. CPI excluding food and energy for August is expected to remain at 2.4% growth year over year.
The dollar could end the week lower if retail sales for August hit estimates. The numbers across the board are expected to slow.
Excluding autos, retails sales are expected to grow 0.3% compared to 0.6% the previous month. The retail sales control group is expected to slow to 0.4% compared to 0.5% previously.