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UK CPI lower than expected while German investor sentiment deteriorated – BBH

FXStreet (Delhi) – Research Team at BBH, note that the UK CPI print came lower than the market expectations while the German investor sentiment deteriorated more than the expectations.

Key Quotes

“UK's CPI was lower than expected. This has seen sterling sell off. Down almost 0.7% on the day, sterling is the second weakest of the major currencies. The euro is at its best level against sterling since May, reaching almost GBP0.7475. The UK headline rate fell to -0.1% y/y from zero. The core rate was unchanged at 1.0%. The consensus had anticipated a small increase. The combination of firm wages and soft consumer prices would appear to bode well for household finances. However, this assessment is mitigated by the fact that service prices increased to 2.5% y/y from 2.3%. Consumers buy more services than goods.”

“German investor sentiment deteriorated more than expected. The ZEW measure of current situation fell to 55.2 from 67.5. The Bloomberg consensus called for a 64.0 reading. This was the poorest assessment of the current situation since March. The expectations component fell to 1.9 from 12.1. The consensus was for 6.5. This is the lowest since last October, when it briefly slipped in to negative territory.”

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