European Open: GBP & USD in focus

US equities stumbled yesterday and asian equities followed suit with Nikkei down over 1.5%. Seeing as how this uncertainty happened right at September highs on the S&P, there is room for a larger correction if today’s  retail sales disappoint.

Overnight, the Kiwi sold off after RBNZ Governor Wheeler reiterated his easing bias, but also noted that data has improved (higher dairy prices in recent auctions). Hence, I cannot see any new evidence that suggests unexpected dovishness.

On the other hand, Aud was hit by the story in AFR saying that Westpac is lifting mortgage rates on residential property by 0.2%, for owner occupiers and property investors effective November 20th.

Looking ahead we have the UK Unemployment figures (& wages) to look out for, and this will no doubt attract attention. The market is expecting a rise in Average Earnings, and a decline in the claimant count. Recently the tone on Gbp is dovish, so upwards surprizes will most likely generate more of a response than downwards surprizes.

We also have Eurozone Industrial Production before the main event of the day: US retail sales (14.30 CET). The market is expecting stability in the headline number (0.2%) but a decline in the core reading (-0.1% vs 0.1% prior).

No charts for today – these waters are a little too choppy for me at the moment.

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