Most of the morning’s movement came on the forex market, with investors focused on the UK retail sales and Eurozone inflation readings.
There wasn’t really much to cheer in terms of the UK’s retail sales data. Though July’s figure did come in at a better than forecast 0.3%, that isn’t really an improvement on June’s reading, which itself was halved from the initial 0.6% growth stated last month. As for the Eurozone inflation number, it came in as expected at 1.3%, continuing the steady decline from the 2.0% and 1.9% readings seen in February and April respectively.
The very, very slight retail sales beat gave sterling the win, allowing the pound the jump half a percent against the euro (though it still couldn’t cross €1.10). Both currencies, however, struggled against the dollar; the euro lost 0.6% and is now barely holding onto $1.17, while cable shed 0.1% to drift further away from $1.29. It’ll be interesting to see if the euro’s fortunes change following this afternoon’s ECB meeting minutes reveal.
Despite all this forex action there was little change from the European indices. The FTSE’s Kingfisher (LON:KGF) grump was only exacerbated by sterling’s euro-gains, taking the UK index 0.4% lower, while the DAX and CAC both slipped 0.2%.
Looking to the US open and the Dow Jones is set to match Europe’s relatively mild losses, the futures pointing to a 15 point fall after the bell. In terms of data there are a few figures on offer, with the usual jobless claims numbers joined by the Philly Fed manufacturing index, capacity utilization rate and industrial production readings.