This week, the pound sterling should be heckled on the foreign exchange market. A month of four major events are, in fact, expected. To help you understand and transform it in pips, here is some clarification.
Speech by Theresa May – the 15th of may at 20h
The brexit might well go back more than ever on the front of the stage to the end of the month of may. Last April, the british prime minister had surprised the financial markets by calling for elections in June. The bulls book had received the news with joy realizing that with this vote, the Uk would probably be stronger at the negotiation related to the brexit with the EU.
This week, market watchers expect to hear many positive comments on the resilience of the United Kingdom. Note that a question and answer session will take place on the internet, people should know a lot more.
Inflation report – 16th may at 9: 30am
The inflation figures for the month of April are up. The total CPI should, indeed, fall from 2.3% to 2.6% and the core CPI from 1.8% to 2.2% over the same period. Four of the last five publications have, in addition, showed stronger results than expected.
The numbers of underlying inflation such as the consumer price index to the production, the retail price index and the price index of real estate provide clues to the way in which the overall prices might fall in the coming months. Well, the price index of production and index of real estate prices are expected to slightly weaken while the index of retail prices will normally progress from 3.1% to 3.4%.
Keep, however, in mind that a reading of the inflation optimist might not be such a good news for the economy of the United Kingdom. The BoE has, in effect, already pointed out that consumers were struggling to follow the price increase.
Data on employment – may 17, at 9: 30am
Observers of the market may have a better idea of the behaviour of british consumers with the employment figures and, in particular, the average wage gains. The index is expected to move to the three-month period ending in march, from 2.3% to 2.4%. This is a larger increase than expected.
The change in the number of job seekers could, however, show an increase, +5 000. It is a blow, but less important than the previous one and its +25 500.
Report on the retail sales – may 18 at 9: 30am
The figure relating to retail sales in the month of April should provide a more clear picture of how the consumer sector is focused. After the fall of the month of march, -1,8%, due to lower purchase volumes in almost all sectors, a further decline of 1.2% is expected for April.
The governor of the central bank of England has stated that it was the most difficult for the british households in the course of this year. With the brexit ahead, the uncertainties multiply on the markets training with many aspects of the economy of the country.
With a vision as a negative thing, a surprise increase, even small, of the industry could be positive for the pound.
All these events should be led to volatility on the foreign exchange market in general and on the british currency, in particular, so if you are not comfortable in such circumstances, please do not hesitate to sit on the sidelines and observe.