May 16, 2023

Daily Report 16/05/2023

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There were no significant data releases on Monday with Sterling monitoring global risk conditions closely. Equities were able to make some headway which provided an element of demand for the Pound. Bank of England chief economist Pill stated that the bank needed to guard against inflation sticking above 2% in a 4-5% range. UK labour market data recorded a slightly higher unemployment rate and a dip in employment while the economic inactivity rate declined on the month. Wages growth was little changed on the month with underlying growth held at 5.8%. Sterling dipped against the dollar amid doubts whether further interest rate increases will be needed to combat underlying inflation.

Key Data

7.00 ILO Unemployment Rate Act. 3.9% Exp. 3.8% Prev. 3.8

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Euro-Zone industrial production declined 4.1% for March after a 1.5% increase the previous month with a year-on-year decline of 1.4% from a 2.0% gain previously. The data maintained market reservations surrounding the Euro-Zone outlook. The German economy Ministry also stated that the base growth dynamics of the economy had markedly weakened recently. The EU Commission, however, revised up the 2023 and 2024 GDP forecasts slightly with this year’s GDP growth forecasts revised to 1.1% from 0.9%. The 2023 inflation forecast was revised to 5.8% from 5.6% with the 2024 forecast at 2.8% from 2.5%.

Key Data

10.00 Gross Domestic Product (QoQ) (Q1) Exp. 0.1% Prev. 0.1%
10.00 Gross Domestic Product (YoY) (Q1) Exp. 1.3% Prev. 1.3%
15.00 Christine Lagarde Speech

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The US New York Empire manufacturing index slumped to -31.8 for May from 10.8 previously and well below consensus forecasts of -3.7. There was a very sharp slide in new orders with sharp contraction on the month. There was a similar position for shipments while unfilled orders also dipped into contraction. There was a slightly slower decline in the rate of employment while the inflation readings were little changed with a slightly stronger rate of increases in prices paid. Companies were slightly more optimistic over the outlook while employment is expected to decline and inflation pressures are expected to ease slightly.

Key Data

13.30 Retail Sales (MoM) (Apr) Exp. 0.7% Prev. -0.6%
13.30 Retail Sales Control Group (Apr) Exp. 0% Prev. -0.3%