Some mixed Chinese data earlier this morning with higher than expected retail sales but lower industrial production indicates how the world’s second largest economy is shifting to a more consumer based economy. This has had little impact on FX markets overnight, the Aussie is above the 0.7000 level which remains a major support level, cable is holding onto 1.5000 and EURUSD keeps 1.0600 at bay. But European stocks are expected to bounce on the open in what is likely to be another quiet trading session.
Sterling will be in the spot light once again though with UK unemployment data out this morning. Despite market expectations for the first rate hike from the Bank of England to be at the back end of next year, if indeed in 2016 at all, the pound has recouped a lot of ground against the single currency with EURGBP heading back towards the 0.7000 level and the figure to watch will be the average earnings which is expected to rise from 3.0% to 3.2%. A strong release here could give sterling another push higher against the euro and test that 0.7000 level (1.4285 on GBPEUR) and it would put pressure on more MPC hawks to emerge.
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