Key data releases for GBP/USD traders next week - Nomura

Analysts at Nomura offered their previews for the forthcoming and key data Traders will be scrutinising in respect to the pound from the UK next week.

Key Quotes:

"Inflation (CPI, RPI & PPI), retail sales and the budget deficit are key data releases in the week ahead. Rightmove and official house price indicators are also due for publication. 

CPI inflation (Tues): We see inflation moderating slightly from its 2.9% rate in May to 2.8% in June. RPI inflation is also forecast to fall a tenth to 3.6% during the month. We expect the wedge between the two rates of inflation to rise from its current 0.75pp to around 1.25pp in a year’s time largely thanks to mortgage interest payments no longer putting downward pressure on the difference. This is related to our forecast for gradually rising official – and thereby mortgage – interest rates. 

Producer prices (Tues): Input prices are likely to be affected in two directions – downwards thanks to the fall in oil prices during the month, but upwards due to a lower sterling. We think these two effects will broadly offset each other to yield unchanged input prices in June. As for output prices, the PMI output price index has edged lower relative to its peak, as has that of the CBI. Both continue to suggest rising output prices, thus our forecast for a 0.2% m-o-m increase. 

Retail sales (Thurs): Both the CBI and BRC measures of retail sales improved in June, and with official data having fallen markedly in May we think this combination suggests June is primed for a rebound. Even with a forecast 0.8% m-o-m increase during the month, the 3m % y-o-y rate should slow a little further to only modestly above 2.5%, which would be its weakest rate since the end of 2013. Rising prices thanks to sterling’s past declines are the prime cause. 

Budget deficit (Fri): The improvement in the budget deficit relative to a year ago has slowed over the last two months. Indeed, combined, the total deficit for the first two months of the fiscal year (April and May) was almost identical to a year ago. We forecast an improvement of just less than £1bn relative to a year ago in the June deficit which would imply a PSNB-ex deficit of £4bn for the month."