The Weekly Round-up

Sterling has recently experienced a period of extreme strength against both the Euro and the US Dollar, driven more by weakness in the US and Eurozone rather than any inherent UK strength. As a result, a period of relative weakness is expected on the horizon. Although there has been no significant drop-off, this past week has seen consistent losses from the recent highs. Once again, geopolitical news has dominated the economic landscape, with no apparent end in sight as Trump's ongoing announcements continue to make headlines.

?

From a data perspective, the first major release of the week came on Tuesday with the US JOLTS Job Openings. Forecasts anticipated an increase from the previous reading of 7.51 million to 7.65 million. Given last Friday’s disappointing jobs data, this was a particularly key figure. In the end, the release exceeded expectations at 7.74 million, providing some relief for the US Dollar. While this did not translate into significant gains, it did help prevent further losses.

?

On Wednesday, the US released its latest CPI inflation figures. Forecasts projected a slight year-on-year decline from the previous reading of 3% to 2.9%, with the final figures coming in marginally lower at 2.8%. However, the market reaction was limited. In a week dominated by US data, Thursday saw further key releases with PPI and unemployment claims. Core PPI fell below expectations at -0.1%, compared to the forecasted 0.3%, while unemployment claims came in lower than anticipated. As is often the case with these figures, market impact was limited.

?

This morning, UK GDP came in below expectations, showing a contraction of -0.1%, leading to a sell-off in the Pound. Looking ahead, next week is expected to bring significant volatility as both the UK and the US prepare for key interest rate decisions.