Each Monday, we share the latest market commentary from our team to provide investors in UK-based real estate assets with all the supporting information needed to make the best investment decisions going forward. Due to the nature of market volatility at the current time, expectations and forecasts can vary considerably on a daily basis.
Real estate assets always represent security for investors during times of economic and geopolitical uncertainty. United Property Invest specialises in UK-located income generating property assets, with solid fundamentals and stable returns that represent the perfect safe haven for your capital.
To find out more about our exclusive wealth-building opportunities, please feel free to contact our highly-qualified team of consultants by clicking HERE.
24th July 2017 – Brexit Uncertainty Still Bearing Down on the Pound
It’s likely that headlines will continue to move the GBP/EUR pairing as the UK is still having quite a bit of struggle coming to the consensus needed for an amicable divorce from the European Union.
Right now the marketing favours the EUR as the trading community believes that the European Union will be in a stronger economic position than Britain down the road. However, there are a lot of different things to happen between now and then, which will continue to put a lot of volatility into this market.
The general consensus is that the EUR will continue to advance against sterling over the next several months. In fact, longer-term there could even be a move towards parity although given the volatility yet to come, nothing is certain.
Markit Composite PMI Flash JUL
Markit Manufacturing PMI Flash JUL
Markit Services PMI Flash JUL
30-Year Treasury Gilt
CBI Business Optimism Index Q3 1
CBI Industrial Trends Orders JUL
GDP Growth Rate QoQ Prel Q2
GDP Growth Rate YoY Prel Q2
BBA Mortgage Approvals JUN
17th July 2017 – Too Soon to Buy the Pound
Regarding concerns over the near-term outlook for GBP/EUR, analyst Manuel Oliveri of Credit Agricole believes this week’s data docket poses a risk to Sterling.
Retails sales on Thursday and inflation data on Wednesday are tipped to be a key currency driver as they should further inform the whole Bank of England debate i.e. strong data = more of a likelihood of a 2017 interest rate rise.
“While it cannot be excluded that positive incoming data is making a case of even further rising central bank rate expectations to the benefit of the GBP, we believe that upside from the current levels is likely to prove limited,” says Oliveri.
“This is especially true as intact uncertainty as related to Brexit is likely to prevent the BoE from considering higher rates anytime soon, regardless of several central bankers less dovish stance. As such we advise against buying the GBP around the current levels,” adds the analyst.
- Core Inflation Rate YoY Final JUN
- Inflation Rate YoY Final JUN
- Inflation Rate MoM JUN
- Core Inflation Rate YoY JUN
- PPI Input YoY JUN
- PPI Input MoM JUN
- Retail Price Index YoY JUN
- Retail Price Index MoM JUN
- Inflation Rate YoY JUN
- Inflation Rate MoM JUN
- PPI Output MoM JUN
- PPI Output YoY JUN
- Retail Sales ex Fuel MoM JUN
- Retail Sales ex Fuel YoY JUN
- Retail Sales MoM JUN
- Retail Sales YoY JUN
- ECB Interest Rate Decision
Economic Data in Focus for the Week of 3rd July 2017 – The interest rate outlook changes dominate the Forex market
The greenback is still depressed versus GBP and EUR, after last week comments from BOE and ECB chiefs signalled shifting towards tighter monetary policy raising the costs of borrowing significantly last week in the secondary markets.
ECB president Draghi boosted demand from the single currency last week when he announced that the economic growth in EU is broadening although prudence in adjusting the monetary policy is still needed.
GBP/USD soared too to be traded above 1.30 resistance level, after BoE Governor, Mark Carney commented that interest rate hikes would need to be introduced soon.
BOE’s MPC members have voted in their last meeting to leave the interest rate unchanged showing lower tolerance of watching the inflation level above its 2% yearly inflation target.
Markit Manufacturing PMI Final June
Unemployment Rate May
Markit/CIPS Manufacturing PMI June
Construction PMI June
BoE FPC Minutes
New Car Sales Year-on-Year June
Markit/CIPS UK Services PMI
Retails Sales Year-on-Year May
ECB Non-Monetary Policy Meeting
ECB Monetary Policy Meeting Accounts
Economic Data in Focus for the Week of 26th June 2017
After last week’s investor confidence shakeup, this week’s US durable goods orders on Monday morning ET and consumer confidence readings on Tuesday morning should be in the spotlight. Weaker than expected readings could add additional perspective on whether the US economy is indeed slowing as many analysts have forecast.
As well, on Thursday we’ll be given some perspective on the world’s second largest economy, which has dramatic influence on the global economy – China PMI, released Thursday night EDT may shed more clarity on that country’s economy, after mixed readings in recent months.
4am EDT– German IFO business climate (June): expected to rise to 115.1 from 114.6. Markets to watch: eurozone indices, EUR crosses
8:30 EDT – US durable goods orders, Chicago Federal index (May): durable goods orders expected to fall 0.5% MoM from a 0.7% fall a month earlier, while the Chicago Federal index rises to 0.54 from 0.49. Markets to watch: US indices, USD crosses
10:00 EDT – US consumer confidence (June): expected to fall to 116.9 from 117.9. Markets to watch: US indices, USD crosses
10:00 EDT – US pending home sales (May): expected to rise from negative 1.3% to 0.5% MOM and 2% YoY. Markets to watch: US indices, USD crosses
10:30 EDT – US EIA crude inventories (w/e 23 June): stockpiles forecast to fall by 500,000 barrels, from a 2.451 million drop a week earlier. Markets to watch: Brent, WTI
5:00 EDT – Eurozone business confidence (June): forecast to rise to 0.95 from 0.9. Markets to watch: Eurozone indices, EUR crosses
8:00 EDT – German CPI (June, preliminary): expected to rise 1.3%, after a 1.5% increase a month earlier. Market to watch: EUR crosses
8:30 EDT – US GDP growth (Q1, final), initial jobless claims (w/e 24 June): growth expected to be 1.2% QoQ, jobless claims expected to be 243K from 241K a week earlier. Markets to watch: US indices, USD crosses
3:55 EDT – Germany unemployment (June): rate expected to hold at 5.7%, while the number of unemployed falls by 10,600. Markets to watch: eurozone indices, EUR crosses
4:30 EDT – UK GDP (Q1, final): growth expected to remain steady at 0.2% QoQ and 2% YoY. Markets to watch: GBP crosses
The GBP/USD pair’s fall brings it back near to its uptrend line since the October Flash Crash, which increases the probability of a bounce along with the trend line, versus a further decline, which would constitute a reversal.
5:00 EDT – Eurozone CPI (June, flash): expected to be 1.2% from 1.4% YoY, while core CPI holds at 0.9%. Markets to watch: EUR crosses
Economic Data Week Commencing 19th June 2017
Data to Watch for the Pound
We see the prospect of a stronger Pound should the election outcome point to a softer-Brexit.
“The UK election outcome raises a potential for an alternative to the hard Brexit which was what PM May was seemingly pushing for,” says Viraj Patel at ING Bank N.V. “The loss of the Conservative seats has exposed vulnerability to the strategy PM May was pursuing and leaves her very vulnerable within her party. She now needs to accept a broader range of views within the party to secure a leadership.”
In terms of hard Brexit, which GBP crosses seems to be pricing in, it would be difficult to push it through the UK Parliament given the very fragile (potential) Conservative-DUP collation.
A busy week for the Pound kicks off with May Inflation data at 09.30 BST on Tuesday, which is expected to show a slower 0.2% rise compared to the 0.5% rise in April.
Employment data is out at 9.30 on Wednesday, June 14, and although the Unemployment Rate is forecast to remain at a very low 4.6%, it is the Average Earnings Statistic which will be the centre of attention given economists concerns about falling real earnings impacting on consumer spending.
The May Retail Sales release is out on Thursday Morning a 9.30, and is forecast to show a dramatic slow-down, and even a -0.8% contraction compared to the previous month rise of 2.3%.
The Bank of England (BOE) rate meeting is on Thursday at 12.00 but no change in policy or voting is expected, and arch-hawk Forbes will not be present.
Data to Watch for the Euro
The Euro may not trade particularly strongly this week so analysts will look to its counterparts for cues on direction.
The main release will be the ZEW survey of businesses which is regarded as a fairly accurate forward indicator of the economy; it is released at 10.00 BST on Tuesday, June 13.
Industrial Production and the Trade Balance are also out in the week ahead.
Last week’s European Central Bank (ECB) rate meeting was almost exactly as analysts had expected it – a nod to growth discounted by continued concerns over inflation.
This means the focus going ahead will be on data which informs the outlook for inflation.
Economic Data Week Commencing 12th June 2017
9.30am – UK CPI (May): expected to be 0.2% MoM and 2.5% YoY, from 0.5% and 2.7% YoY. Core CPI to hold at 2.4% YoY. Market to watch: GBP crosses
10am – German ZEW (June): economic sentiment to rise to 21.7 from 20.6. Markets to watch: eurozone indices, EUR crosses
1.30pm – US PPI (May): MoM PPI expected to be 0.1%, from 0.5% in April. Market to watch: USD crosses
9.30am – UK unemployment data: April unemployment rate expected to rise to 4.7% from 4.6%, while claimant count for May forecast to be 15,500, from 19,400 a month earlier. Average hourly earnings for April (inc bonus) expected to be 2.3% from 2.4%. Market to watch: GBP crosses
1.30pm – US CPI, retail sales (May): CPI expected to be 2.1% YoY and 0% MoM, from 2.2% and 0.2% respectively. Retail sales forecast to grow 0.3% MoM, from 0.4%. Markets to watch: US indices, USD crosses
7pm – Fed meeting (press conference 7.30pm): the committee is expected to raise rates to 1.25%, the second increase this year. Watch for the commentary around the decision, and whether more hikes will be coming later in the year, but also keep an eye out for discussion of the unwinding of QE, which was raised earlier this year. Market to watch: US indices, USD crosses
9.30am – UK retail sales (May): forecast to rise 3.4% YoY and fall 1% MoM. Market to watch: GBP crosses
12pm – BoE rate decision & statement: no change on policy expected, although the BoE’s view on inflation could provoke volatility in sterling. Market to watch: GBP crosses
1.30pm – US initial jobless claims (w/e 10 June): claims expected to be 243K from 245K a week earlier. Markets to watch: US indices, USD crosses
10am – eurozone inflation (May, final): expected to be 1.4% YoY. Market to watch: EURUSD crosses
1.30pm – US housing starts & building permits (May): expected to see building permits rise to 1.25 million and 1.22 million for housing starts. Markets to watch: US indices, USD crosses
3pm – US Michigan consumer confidence (June, preliminary): forecast to fall to 96.9 from 97.1. Markets to watch: US indices, USD crosses
Economic Indicators Week Commencing 5th June 2017
Threat of Hung Parliament Looms over GBP
Fundamental Forecast for British Pound: Neutral
- GBP/USD at risk of facing range-bound conditions ahead of the snap general election on June 8, amid the tightening race between the Conservative and Labour party.
- The outcome of the election may derail the near-term recovery in the British Pound should Theresa May fail to establish a more unified government.
- With ‘Brexit’ negotiations slated to start on June 19, a loss of confidence in the prime minister’s ability to deliver the UK out of the European Union (EU) is likely to drag on Sterling.
- The Bank of England (BoE) may continue to endorse a wait-and-see approach at the next policy meeting on June 15, and Governor Mark Carney & Co. may tame interest-rate expectations throughout 2017 amid the uncertainty surrounding the U.K. economy.
- The BoE may show a greater willingness to carry its policy stance into 2018 as officials now warn ‘consumption growth will be slower in the near term than previously anticipated.’
- The diverging paths for monetary policy may continue to foster a long-term bearish forecast for GBP, particularly in its pairing with USD.