Welcome to the weekly outlook starting this Monday, October 9. We’ll be looking at the week’s key economic events on the financial calendar covering Monday to Thursday. It’s a heavy data week ahead with plenty of action across all global markets. Keep an eye also on Friday as key inflation figures are due for the US with Retail Sales and Consumer Price Index.
Event: German Trade Balance
Date: Tuesday 10 October 2017 at 06:00 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #eur, #trade
With a soaring manufacturing sector, Germany’s trade surplus is way above even China or Japan. Last month the figure increased by €19.5 billion and foreign sales are expected to grow 5% over the year against an original estimate of just 1.2%. The Ifo Institute for Economic Research is forecasting that the nation will have the largest trade surplus than any other country around the world. This had led to criticism from the White House and the IMF who would like to see Germany importing more. While local businesses and employees are benefiting from this, Southern European countries, still struggling out of the financial crisis may put Germany at loggerheads with the European Commission.
Event: UK Manufacturing Production (August)
Date: Tuesday 10 October 2017 at 08:30 GMT
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #gbp
A number of key trade and industry indicators are out for the UK at the same time on Tuesday. Manufacturing Production at the previous reading came in at 1.9% year on year change and Industrial Production was at 0.4%. The Trade Balance (non-EU) was at GBP -3.84 billion while the Total Trade Balance was -2.872 billion. The UK economy has started feeling the Brexit pinch and the sterling has been taking a beating as a result.
Event: UK Inflation Report
Date: Wednesday 11 October 2017
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #gbp, #inflation
The UK has the highest inflation rate amongst the largest, G7, world economies. Inflation increased to 2.9% in August against 2.6% in July making it a four year high for the consumer price index. The UK’s reliance on imports is behind the rise in inflation as consumers have less buying power due to a weaker sterling following the Brexit referendum. GBP is still 10% below its pre-referendum value. As most central banks aim for 2% inflation for sustainable growth, the Bank of England may look to increase interest rates in an effort to support the pound.
