Good morning,
It is a quiet start to the week with the euro exchange rate area trade balance (June) and the US NAHB survey (August), the only data of note. Buying euros as a whole continues to have a sizeable trade surplus, in part boosted by weak imports due to the lack of domestic demand. June is likely to have seen another sizeable surplus.
The weakness of the upturn in the US housing market remains an area of concern that has been highlighted by Fed Chair Janet Yellen on a number of occasions.
Key data for the rest of the week in the UK include retail sales and CPI inflation. Markets expect the former to show buoyant sales in July and the latter subdued inflation.
Monetary policy is likely to be a focus of attention this week in both the UK and the US. The minutes of the last MPC and FOMC meetings will be released and will be scrutinised for signs of growing divergence in views. The Fed will also hold its Jackson Hole Symposium, with Fed Chair Yellen’s speech on Friday a particular focus for markets.
MORNING MARKET RATES:
GBPEUR 1.2497
GBPUSD 1.6733
EURUSD 1.3389
GBPSEK 11.452
GBPAED 6.1459
GBPAUD 1.7956
EURGBP 1.2507
GBPJPY 171.43
GBPCHF 1.5127