The consumer is alive and kicking in the UK. UK retail sales chalked up its largest monthly gain in 11 months in January. Sales rose 0.8% m/m and 5.6% y/y versus expectations of 0.3% and 4.7%. Such strong retail sales numbers are unexpected, given the sluggish state of the UK economy. The market is thinking the Bank of England may be unreluctant to cut interest rates

further.

The British pound got a huge boost from this data - Cable rose 160 pips following the release, and its next bull targets are 1.9600 and 1.9630.

US Philadelphia Fed business index for February plummeted to -24, and that’s a jaw dropping fall compared to the -12 expected. January’s index was at -20.9. February’s drop is the biggest drop since October 2001.

The US dollar may trade to the downside following this.

EUR/USD’s next bull targets come at 1.4800, 1.4840-50.

Friday:

BOJ’s Fukui speaks 0300 GMT

Eurozone PMI 0900 GMT

Eurozone industrial new orders 1000 GMT

Canada retail sales 1330 GMT

Posted in Categories: Forex.

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