Sterling is higher against the greenback this morning, hovering at the 1.2900 level after UK Retail data beat estimates. USD/JPY is up 0.1% to trade above 140 and AUD/USD slips 0.1% to 0.6774. EUR/USD ticks higher but remains trading mid 1.11-1.12. Yesterday, US initial jobless claims fell, suggesting resilience in the labour market, driving yields higher, with the 2-year yield gaining 7bps and the 10-year yield 10 bps.
UK Retail Sales Including Auto Fuel MoM was up 0.7% in the month of June vs. 0.2% estimated by economists. On a yearly basis, the same gauge dropped 1.0% vs. -1.6% estimated. Sterling rose as much as 0.3% to 1.2904, as bets that the BOE will remain hawkish build up, again.
Japan’s consumer prices advanced at a fast pace for the month of June in another indication that inflation remains sticky, a week before the BOJ policy meeting.
On other news, Spain will have a general election this Sunday, July 23. Polls suggest centre-right wing opposition PP is the one likely to win with most votes, but it may need the help of the far-right party Vox to govern. There are two potential economic outlook risks for Spain, the first one being Vox pushing PP to cut interest rates permanently in a country that has a high level of debt. Secondly, a change in government will put EUR 92million of EU money in doubt.
Have a good weekend.
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