UK DATA: Retail sales a bit softer than expected - no real market/ monpol impact
Retail sales a little softer than expected. This year Black Friday was not included in the sample period but it was last year. However, the ONS has noted that its seasonal adjustment accounts for the shift in timing.
- We wouldn't really place too much weight on this reading though - we don't think any seasonal adjustments for things like Black Friday capture the event perfectly so we prefer to look at Nov+Dec combined (which the BOE will have by the time of the February MPC meeting).
- Public finance data showed a smaller deficit in November (GBP2.4bln below consensus) but there was a higher revision to the year to October of GBP5.4bln which more than offset this.
- Overall we don't think there is anything in today's data that will really impact markets. GBPUSD saw no real reaction to the release.
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GOLD TECHS: Finds Support
- RES 4: $2790.1 - High Oct 31 and the bull trigger
- RES 3: $2710.4/2750.0 - High Nov 11 / 5
- RES 2: $2651.3 - 20-day EMA
- RES 1: $2641.8 - Intraday high
- PRICE: $2629.5 @ 07:19 GMT Nov 20
- SUP 1: $2536.9 - Low Nov 14
- SUP 2: $2511.1 - Low Sep 12
- SUP 3: $2472.0 - Low Sep 4
- SUP 4: $2415.9 - 38.2% retracement of the Oct 6 ‘23 - Oct 31 bull leg
The long-term trend condition in Gold is unchanged, it remains bullish and the latest move down is considered corrective. Price has recovered from its recent lows. The 20-day EMA is at $2651.3. A clear break above it would highlight a possible reversal and signal and the end of the recent bearish corrective cycle. This would open $2710.4, the Nov 11 high. Key short-term support lies at $2536.9, Nov 14 high. A break would resume the bear cycle.
UK DATA: UK CPI Driver Details
- Comparing that to the forecasts services is a tenth higher than consensus but only 0.05ppt above the BOE unrounded forecast.
- Core goods was also higher than forecast, 0.15ppt about the MNI median and 0.07ppt above the BOE forecast.
- Going into the data, we had flagged upside risks from air fares, second hand cars and clothing - the first two of these saw larger upside surprises than expected while clothing increased more in line with expectations.
- Air fares contributed 0.07ppt to the change in headline CPI (and about double this contribution to services). Package holidays partially offset this, contributing -0.03ppt.
- Second hand cars we had expected to add 0.05ppt to headline CPI, but they were even stronger than we expected, adding 0.08ppt.
- Clothing and footwear increased from 0.84%Y/Y to 1.03%Y/Y (in line with our expectations).
- The biggest downside contributor was "recreation and culture", which contributed -0.11ppt to headline CPI, with cultural services contributing -0.06ppt of that alone.
- Energy was the big contributor - but that was almost exactly in line with expectations.
BTP TECHS: (Z4) Corrective Cycle Remains In Play
- RES 4: 122.62 High Oct 1 and a key resistance
- RES 3: 122.41 High Oct 18 / 21
- RES 2: 151.50 76.4% retracement of the Oct 1 - Nov 7 bear leg
- RES 1: 120.89 High Nov 19
- PRICE: 120.45 @ Close Nov 19
- SUP 1: 119.12/117.88 Low Nov 13 / 7 and the bear trigger
- SUP 2: 117.70 61.8% retracement of the Jun 11 - Oct 1 bull cycle
- SUP 3: 117.34 Low Jul 26
- SUP 4: 116.54 76.4% retracement of the Jun 11 - Oct 1 bull cycle
Despite the continued recovery in BTP futures, a bearish tone remains intact and gains are considered corrective. A resumption of the downtrend would refocus attention on 117.70, a Fibonacci retracement point. Initial support to watch is 119.12, the Nov 13 low. A break of this level would be seen as an early bearish signal. On the upside, the 50-day EMA has been breached, a continuation higher would open 121.50, a Fibonacci retracement.
