4:30 UK Retail Sales (Ex AutoFuel) m/m (-0.4% expected, +0.6% prior, -1.0% to +0.8% range)
or UK Retail Sales (w/ AutoFuel) m/m (-0.3% expected, +0.6% prior, -0.9% to +0.5% range)
Affliated Reports:
UK Retail Sales (Ex AutoFuel) y/y (+0.3% expected, +0.9% prior, -0.4% to +1.4% range)
UK Retail Sales (w/ AutoFuel) y/y (+0.4% expected, +0.9% prior, -0.3% to +1.2% range)
Last month a +0.9 deviation on ExAutoFuel m/m along with a +0.8 on w/AF m/m, with -0.1 revisions
to the previous month, this lead to a 30 pip pop on the GBPUSD, all in the 1st minute after the
release. Within 5 minutes the pair was back down to pre-release price. A good deviation but
no continuation past the initial spike seen. Not a good reaction, normally we would have expected
to see continuation past the initial spike high with this kind of deviation. We must remember that
the broader trend seen during November has been down after October's sharp upward correction to
1.6165. Also with lots of Economic Uncertainty and Risk-Off Sentiment, news tends not to do so
well, we saw this in 2008 during Lehmans & AIG and 6 months following this into the early 2009
Stock market lows, and we are seeing this now. In October a +0.5 dev on ExAF m/m and +0.6 on
w/AF came with revisions to the previous month of -0.3 and -0.2. The pound briefly spiked higher
about 20-30 pips as price action was whipping about in a 10 pip range into the release. There has
not been a good deviation on this one since June when this one came out lower, with -1.0 on ex/Gas
and -0.8 on the w/Gas m/m figure, and cable shot down about 50-55 pips in the 1st minute, retracing
50% or so and more like consolidating for about half an hour before selling off another 60 pips or
so over 3 hours. The +0.6 ex/Gas and +0.7 w/Gas deviations seen in April, produced a good initial
spike and virtually no retracement and plenty of continuation of the move. In May there was a better
response to a smaller deviation than October so we have to widen out the triggers.
-If either comes out deviating +1.0% or more above expected reading,
GBP/USD should rally sharply for at least 40 pips
-If either comes out deviating -1.0% or less below expected reading,
GBP/USD should fall sharply for at least 40 pips
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