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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

UK retail sales drop; Cold weather blamed

10:28 20 June 2019

Summary:

  • UK retail sales M/M : -0.5% vs -0.5% exp

  • Unseasonably cold weather cited behind the drop

  • Pound continues to recover; GBPUSD > 1.27

 

A drop in the latest consumer spending figures for the UK have raised further concerns surrounding the health of the economy and also they don’t bode well for the second quarter growth figures. The month on month drop of 0.5% was inline with expectations after a prior reading of 0.0% and the print ends a run of 4 consecutive beats for this metric, as retail sales have surprised to the upside for several months before this latest reading which was for May.   

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 After a good run of late, the most recent UK retail sales figures turned negative once more and while this drop was in line with consensus forecasts it is still a little worrisome nonetheless. Source: Bloomberg, Forexlive

 

As is often the case with spending figures, the poor performance has been blamed on the weather with an unseasonably cold period contributing to a considerable decline in clothing sales. A strong labour market with the unemployment rate at its lowest level since 1974 has helped retail sales recover so far this year after a poor showing last Autumn, but the outlook remains not too favourable with the ongoing lack of clarity n Brexit. Online sales continue to show rapid growth as traditional outlets such as department stores and household goods contracted.

The rapid rise in internet sales remains a positive for the retail market, but this is coming at the expense of department stores who continue to struggle. Source: ONS, FT

 

After falling down to its lowest level of the year (barring the early Jan JPY-led flash crash) earlier this week there’s been a pretty impressive recovery in the Pound, helped in no small way by the dovish shifts seen from the ECB and the Fed. Wednesday’s gains confirmed a morning star formation on the daily chart for GBPUSD and price is now back above the $1.27 handle and not too far from prior swing resistance at 1.2775.

The GBPUSD pair is now back above the 21 EMA (yellow line) which is a pretty rare occurrence in the past 6 weeks or so. Is the trend turning higher? Source: xStation      

 

 

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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