Economic news to watch ahead of NFP
Our week kicked off with New Zealand’s CPI increasing to 0.2% from 0.0% forecast. UK CPI also increased from 0.9% forecast to 1.0%. Canada manufacturing sales increased by 0.6% from 0.3% expected to 0.9% actual. U.S CPI held steady at 0.3% while the Core CPI dropped by 0.1% from 0.2% forecast to 0.1% actual. UK Average Earnings held steady at 2.3% while Claimant count dropped from 3.4K forecast to 0.7k actual, this meant that the number of people who were claiming for unemployment related insurances have actually decreased.
The U.S Building Permits rose to 1.23M from 1.17M forecast. Bank of Canada kept their rates at 0.50%. Australia Employment change dropped to -9.8K from 15.2K expected while the Unemployment dropped by 1% from 5.7% expected to 5.6% actual. UK Retail sales dropped to 0.0% from expected 0.3%. Another highlights from Thursday was the European Central Bank (ECB) press conference, you can watch the recording and listen to the ECB president Mario Draghi HERE. U.S Unemployment claims increased from expected 251K to 260K. We wrapped up our week with Canada CPI which held steady at 0.2% while the Core retail sales dropped from 0.4% to 0.0%. Below are the economic news to watch this week.
The importance of Retail Sales and Core Retail Sales in Forex markets.
Retail sales are the change in total value of inflation adjusted sales at the retail level. Retail Sales are a gauge of consumer spending which accounts for the majority of overall spending. Retail sales usually correlates with the Non-Farm Payroll (NFP). When the number of people increases, the chances of getting a higher Retail and Core retail Sales becomes higher. Apparently big spenders are workers otherwise why would these two correlate? Retail Sales include in-store sales, catalogue and out-of store sales.
Core Retail Sales
Core retail sales exclude Automobile and gas sales. They are excluded due to their volatility. Core Retail Sales are also used to calculate GDP, developing Consumer Price Indexes and analyzing the current economic health of a country. Federal Reserve (Feds) also uses it to asses the consumer behavior. We had U.S Core Retail Sales on the 14th (last Friday). It increased by 0.1% from expected 0.4% to 0.5%.
Core Retail and Retail Sales that I follow
Economic news to watch this week.
UK Prime mister Theresa May announced last week that the UK will be invoking article 50 to start with the process of officially leaving the EU. The markets got jitters and the GBP crumbled and kicked many traders who were holding GBP pairs out of the markets. On another news the Manufacturing PMI rose up to 55.4 as opposed to 52.1 forecast. The U.S ISM Manufacturing PMI also rose to 51.5 from expected 50.4. RBA (Reserve Bank Of Australia) left their interest rates unchanged at 1.50%. Australia Retail Sales increased to 0.4% from 0.2% forecast. The U.S Job number (NFP) declined and came out at 156k as opposed to 171k forecast while the earnings remained unchanged at 0.2% and the unemployment rate increased by 1% from expected 4.9% to 5.0%. Below are the economic news to watch post NFP.