The Consumer Price Index report for the United Kingdom is due out tomorrow Tuesday 14 January 2014. The report will highlight the numbers for the month of December 2013. At this time, many experts do not believe that there will be any change in the rate in relation with the previous month of November 2013.
As has been noted in previous reports, the Consumer Price Index report is an important indicator of inflation in the economy. As the CPI measures the cost of a set basket of basic goods, it is sensitive to shifts in prices for consumers. As prices of these items rise or fall, it can affect the spending abilities of the public and therefore influence economic activity in that country or region.
Analysts note that the UK has enjoyed a series of positive reports in recent months, showing improved growth. It should be noted that with the growth, there are concerns that inflation could rise, pushing up the cost of living.
Traders advised to watch the pound closely in the coming days following the release of this report.
US Advanced Retail Sales Report to be Issued Tomorrow
The report detailing the level of Advanced Retail Sales for the US is expected to come out tomorrow 14 January 2014. The report will cover the figures for the month of December 2013. At this time, many experts have expressed that they believe that the report will show a reduction from the previous month of November 2014.
Analysts believe that the low estimate by experts may be incorrect as the Christmas shopping season likely helped to boost sales. Additionally, the jobs data from November indicates that more people were employed and were capable of spending on retail products.
Readers are reminded of the importance of this report as it relates to spending on consumer goods, which is estimated to comprise nearly a third of all US consumer spending. Consumer spending is believed to make up two thirds of American economic activity. As such, changes to this rate have shown in the past to have a significant impact on the market. It is also an important indicator for the level of growth and health in the economy as the amount of sales can often be expected to match confidence in the ability of consumers to purchase said retail products.
Traders are advised to watch for some level of volatility in the US dollar in trading over the coming days as investors are likely to continue to watch how the Federal Reserve advances with its reduction of the stimulus measures. Additionally, the lower than expected job numbers for the month of December could make some traders skittish on the dollar.
Yen Rises as Traders Back Down on Bearish Bets
It was reported on 13 January 2014 that the Japanese Yen had touched its highest level in three weeks after global currency traders decided to ease off on their bearish positions. The return of investors comes after the Yen has faced difficulties with traders in recent weeks as the Japanese economy attempts to jump start growth. According to the reports, the Yen succeeded in making gains against the euro and has succeeded in advancing against the dollar.
Analysts note that the growth plan as set forth under the Abenomics structure that was initiated by Prime Minister Shinzo Abe has made efforts to boost inflation and make Japanese exports more attractive on the global market. This plan comes against the backdrop of massive quantitative easing measures by the Bank of Japan aimed at bolstering the economy. Analysts believe that the levels of pessimism against the Yen may have faded somewhat in recent weeks.
Traders are advised to watch for a strengthened Yen in trading over the coming days, with an emphasis against rivals such as the US dollar and the euro.