Tuesday started off with retail sales release from BRC (British Retail Consortium). Even if figures did improve for December, the ‘golden quarter’ between October and December did produce dire numbers and almost a flatlining retail sector, with households prioritising their spending power on food and drink during the festive period. Retailers who do rely on a bulk of annual profits coming from this period – are now facing difficulties after a poor performance and could be forced to cut thousands of jobs within the sector. It will be vital to follow the development within the retail sector – as inflation rates have started seeing signs of an upward trajectory – which would suggest that consumers will hold off spending further. It was not only the retail sector that faced challenges in December, UK did also see house prices decline in the month of 0.2%. This is the first decline in housing prices in the last nine months. The overall view for 2025 don’t look to promising either with a ‘modest’ growth on the housing market.
At 10am today, we will see unemployment rates for the European Union. Last month highlighted a level of 6.3%, which is way above the target region of 4%. Expectations is that there will be more people left without a job and that the total unemployment rate will increase to 6.4%. Europe is facing major issues with its economy of finding a balance where economic growth improves while inflation rates are not running away (seeing recent upswings). With the job market underperforming while inflation levels increase and economic growth flatlines – there is evidence of potential fears of recession.
Job data will be the main talking point at the end of the week, Friday. When US release their non-farm payroll. We have already seen USD taking some losses in the week in anticipation of the release. Expectation is that there will be 160k new jobs created, a fall of 67k jobs less than its previous month of 227k. That would set an average for 2024 of 180k jobs, the lowest average for the US in three years for their job figures.
GBP/EUR 1.2041 GBP/USD 1.2548 GBP/AED 4.6117
GBP/AUD 1.9980 GBP/CHF 1.1349 GBP/CAD 1.7954
GBP/NZD 2.2082 EUR/USD 1.0407 GBP/ZAR 23.2700